East Sweden

East Sweden perfect for SoffaDirekt

Selling furniture is nothing new. It's been done in all ages, in all parts of the world. But that new sofas and beds are only a push of a button away, with delivery time roughly the same as a letter – that's an example of hyper-modern e-commerce, operating from Norrköping. Reducing costs and minimising delivery time were top of SoffaDirekt's wish list in their choice of establishment location.

Choosing the right location when starting up a business is important. Especially for a company that has chosen the Internet as its only trading place and in principle could make its base anywhere at all. Access to the Net's potential customers is virtually unlimited and buyers are found both locally and globally. For SoffaDirekt, which delivers directly to the end customer, it is about being able to get their products to as many customers as possible rapidly and cost-effectively. Customised logistics solutions, an advantageous geographical location and relatively low costs for warehouse space and staff, are some of the main reasons why SoffaDirekt decided on Norrköping.

Innovative business solution

The founder of SoffaDirekt, Roberto Mazzarella, had a clear vision to offer consumers a more customer-friendly alternative when purchasing furniture. He designed an innovative business solution with production in his own factory, showing of the furniture in unmanned showrooms open around the clock and he also chose to sell exclusively via the Internet. In this way, he peeled away intermediaries, shop premises and expensive sales forces and could keep prices far below the norm.

E-commerce is all about logistics

The main prerequisites for keeping prices competitive were already in place, but how would this furniture company supply their customers with their newly ordered sofas and beds?  What distinguishes SoffaDirekt from many other e-commerce companies is that they trade in very bulky goods. It costs huge amounts to ship large packages. SoffaDirekt worked on a way to build their furniture in parts which in turn could be packed into as cost-effective consignments as possible. Now they also had the possibility of keeping their freight costs relatively low. But where should they set up to achieve the best profitability?

Norrköping close by

With all of Sweden as their market, SoffaDirekt looked for a strategically located site with good communications to a large catchment area. With Sweden's largest single market, Stockholm, just a stone's throw away in terms of shipping, and as many as 80 per cent of all Swedes within a radius of 400 km, Norrköping is geographically speaking very advantageously located. Its close proximity of the E4 and the network of national roads enable efficient transport via lorry. SoffaDirekt has concluded unique agreements with logistics partners and Roberto Mazzarella is very pleased with the short delivery times the company can offer starting out from Norrköping.

Alternative delivery means

Norrköping's direct proximity to a deep-water port, airport, railway and European highway offers alternative freight solutions. Already today, parts of SoffaDirekt's product range come via ship into Norrköping Port. If Roberto Mazzarella should need to expose different freight options to competition, there is also the possibility of packing the furniture in containers and sending them via the railways.

Pricing advantages

To be able to keep really short lead times to the customer, the furniture must be in stock, ready to be sent directly after the order has been placed.  Norrköping's transformation from a purely industrial city to a place that offers a more varied range of services has provided good access to vacant warehouses. SoffaDirekt has expanded rapidly and has needed to expand into bigger warehouses twice in 18 months. Compared with the equivalent warehouse space in a suburb of Stockholm, Roberto Mazzarella estimates that he has saved just on 30 per cent in rental costs. In addition, there is good access to highly skilled staff in logistics and warehousing, who also cost less to employ than for the equivalent jobs in the capital, for example.

Despite the fact that the quality, comfort, affordability and design of the furniture are of course the focus, the business's logistics solution is its absolute heart.  SoffaDirekt is building up showrooms in more cities in Sweden and has an international market in its sights. But there is no reason to move the warehouse and headquarters, says Roberto Mazzarella. The combined benefits that Norrköping offers are hard to beat. Norrköping is quite simply perfect for SoffaDirekt.

Text: Marie Karlsson, Copy & Writing
Photo: Ida Ling Flanagan, IdaDesign