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AFW's secret to an efficient business

AFW's secret to an efficient business

Did you know American Furniture Warehouse is more than a place where you buy lifestyle furniture?

The Colorado institution is akin to a machine.

A very well-oiled machine. Without the 14 stores and six distribution centers in Colorado and Arizona each doing its part, it wouldn't work. But this streamlined machine takes self-sufficiency and efficiency to new levels. And that is a big reason why it's able to sell furniture at the lowest prices.

For CEO Jake Jabs, an efficient business is not just a catchphrase to slap on the company's trucks, which, by the way, it owns. And the signs you see on those trucks also come from AFW's own marketing and sign department.

For Jabs, the efficient way he runs his company is a lifestyle. It's a culture. He uses the same mentality when it comes to his personal finances.

“I've never had a car payment,” Jabs says. “I've never had a mortgage. I paid cash for my first car.”

He doesn't live beyond his means or his company's.

When you see how streamlined American Furniture Warehouseis, it makes total sense.

It's not just those individual stores or distribution centers that make this machine work. Without those pieces that make it such an efficient business it would fail to function as well it does. Imagine what happens when your car's engine doesn't get regular maintenance. Over time, it won't run right, if at all.

How and why that impacts you is it allows AFW to give you the highest quality furniture for the lowest possible prices.

What are the pieces of this well-oiled effective business?

Customer Service

AFW is so much more than just an efficient business - it's about, you, the customer.

“Customer service doesn't end when you walk out the door,” he says. “It continues until they get their furniture and they're happy with it in their home. If they're not happy with it, I'm not happy.”

American Furniture Warehouse earns every customer's business, and doesn't take that lightly. The goal of any company is to earn the business of the community, and get them to keep coming back.

Buying Power

AFW's buyers travel the globe to find the best styles and values for their customers. The buyers purchase in large quantities directly from factories, which eliminates the middle man. They pay cash to get the prices from suppliers and pass that savings on to their customers.

Property Ownership

American Furniture Warehouse doesn't have any debt. That's why the company has been and remains so successful after 40 years while so many others have gone out of business. Jab's company survives recessions.

“When the next one hits, we'll make it through that one,” he says with a smile.

AFW owns all of the buildings in the company. It doesn't pay rent.

Trucks

That's why AFW owns all of the delivery trucks in its fleet. In fact, the company just purchased new tractor trailers that have already saved the company over $1 million. Here's the breakdown of the AFW fleet:

  • 139 semi trucks
  • 120 city delivery trucks
  • 285 53-inch trailers
  • 103 support/service vehicles
  • 258 fork lift/warehouse vehicles

Delivery

The delivery drivers also are trained professionals who work for AFW. Third-party delivery companies just couldn't and don't represent the company and what it stands for.

There's a huge risk of a disconnect. That's when problems arise and companies lose customers.

But it doesn't stop there.

Vehicle Maintenance Shops

AFW employs its own professional techs to work on that fleet of trucks and tractors at six tech shops: four in Colorado (Englewood, Thornton, Firestone and Grand Junction) and two in Arizona (Gilbert and Glendale). There are 48 skilled vehicle techs who handle everything from oil changes to major mechanical problems. The company also buys oil, washer and radiator fluid so it's on site, ready when needed. The company purchases oil for about .99 cents a gallon as opposed to over $3 gallon. That's another instance when buying in bulk saves money.

When a company takes a commercial vehicle to an outside mechanic, they can charge up to $120 per hour. When a company has a fleet the size of American Furniture Warehouse, those expenses add up quickly and increase operational costs. When a company has vehicle maintenance done in-house, that allows for better and faster service and also greatly reduces fleet downtime.

Furniture Assembly/Repair

AFWalso assembles its own chairs and manufactures decorative mirrors and picture frames. Not only does that save money in terms of buying, it actually turns into a profit when those products are sold. All while that creates steady, well-paying jobs.

If you're getting the impression that AFW limits waste, you're right. It takes that to the literal sense, too.

Recycling

The company manages recycling operations in-house. All cardboard, plastic wrap, styrofoam and other packaging products are sorted, compacted, bundled in specialized equipment and hauled to recycle centers in AFW trucks. Why pay another company when American Furniture Warehouse can do it itself for far cheaper?

So AFW really does cut out the waste from the company.

Advertising/Marketing

The TV commercials you have seen since 1975 are created, filmed and edited in-house.The company employs its own marketing staff for digital, print and web.

Printing/Signage

As mentioned earlier, the signs you see on the delivery trucks, posters and signs at the stores are created and printed in-house.

Yes, that even includes the stop signs in the parking lots.

Custodial/Plumbing/Landscaping

The custodial staff is employed by AFW. As are the plumbers. If there are problems with toilets or sinks, no money is flushed away.

Even the landscaping and snow plowing is done by employees of AFW.

Jabs is always on the lookout to cut expenses and save his company even more to keep products in the stores at rock bottom prices.

If that isn't efficient business, Webster's Dictionary needs to alter its definition. But it doesn't stop there.

Giving Back

This efficient business model not only saves customers money, it enables the company to donate to the communities where its stores are located.Last year AFW donated nearly $3.5 million to various charities, organizations and schools throughout Colorado and Arizona, as well as many national and global charities. Those totals include cash, gift cards and merchandise.

Jabs also donates in terms of time. Every chance he gets, he speaks to high school and higher-education students about the importance of hard work and loving what you do "so you Don't have to work a day in your life." He also gives speeches to businesses, clubs and organizations.

Without each of those pieces pulling its weight, American Furniture Warehouse would not be as efficient as it is. It wouldn't be as successful. They all tie together and allow you, the customer, to get the lowest possible prices. AFW really is a well-oiled machine.

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