Taiwanese Metal-bed Makers Target Niche Customers

A few makers of metal beds have managed to survive in Taiwan's deteriorating manufacturing environment, carving out niches for themselves by emphasizing self-design, small-volume and large-variety production, quality control, and product detail.

The development of products designed by themselves enriches the product lines of these manufacturers, helping them to win business from smaller buyers by offering a wide range of choices. They are able to supply special kinds of products that cater to the tastes of niche customers-and provide relatively high profit margins at the same time.

This design capability also impresses larger buyers, and encourages them to place orders as well.

An image for quality also enables manufacturers to command higher profit margins. In addition, the manufacturers say, strict quality control saves them money by cutting the ratio of customer claims. This is important because, while raw materials prices have stabilized, profit margins remain low following the appreciation of the New Taiwan dollar.

This year's market trends, producers report, feature retro design and simpler styling.

One leading producer in the line, AMTOP, has launched a number of new models featuring the combined use of iron and wood. These models also sport manual painting in several layers, giving them a special flair.

One of the company's key strategies in recent years has been the development of self-designed products. "For the OEM (original equipment manufacturing) business, " explains Milton Hsieh, AMTOP's general manager, "you never know when buyers will withdraw their orders."

More Self-designed Products

Self-designed products (created by two designers from the Philippines) now account for 10% of the company's total output, and Hsieh hopes that the ratio will be heightened to 20-30% within the next few years.

The frames of AMTOP's beds are made of cast iron decorated with wrought-iron patterns. Their prices range from US$60 to US$200 FOB; 60-70% of total production is shipped to the United States, followed by Europe with 20% and the Middle East with 5%.

The company manufactures its beds at a 200-worker factory in Zhongshan, mainland China. Its Taiwan office, which mainly takes orders, has a staff of only five.

The Shin Herng Yang Co. has introduced five or six new models of electroplated metal beds, featuring retro styling and a verdigris finish, tagged at US$100 to US$120 each FOB. All are creations of the company's five-person design team.

"Self-designed products enrich our product line for selection by buyers, " remarks Jack Yang, the company's general manager. "We embrace the small-volume, large-variety mode of production; and as a result, we can command higher prices for our products."

About 90% of the company's products are electroplated. "In general, " Yang explains, "we shun coated models because they are the products that our mainland Chinese competitors excel at. The mainlanders are weaker in electroplating, and the colors of their electroplated models often turn red or black after a certain period of use."

Shin Herng Yang's products feature decorative patterns made of zinc alloy. They have a solid structure, thanks to the use of complete welding rather than spot welding in their frames.

The models are produced at a 50-worker factory in Shenkang village, in the central Taiwan county of Taichung. This year's sales are expected to maintain the 2004 level of US$4 million.

The Regal Furniture Co., another outstanding bed manufacturer, turns out beds of forged iron that show the flavor or manual labor that contrasts with the mechanical look of cast products. They also have a rustic European style, which differentiates them from the monotonous styles of mainland Chinese products. They are also differentiated by their prices, which are double those of mainland counterparts. Plain white and lustrous coatings are available. They have a solid structure capable of supporting 400 kilograms.

Electric Beds

The company also produces an electrically operated bed, priced at US$400 FOB, that allows users to raise the top and bottom via remote control. A massage function is also available.

Regal Furniture maintains a nine-worker factory in Taiwan, mainly for small-volume, large-variety production, and farms larger orders out to supporting plants. Revenue for this year is expected to be down slightly from the 2004 level of US$3 million, says general manager Liao Chia-hung.

The Metric Bed Co. has launched a number of new models, in both classical and contemporary styles, this year. "We may not necessarily win orders for our self-designed products, " says the firm's general manager, George Yu, "but they prove our capability, and that's often a great help in soliciting large OEM orders."

The beds are mostly electroplated models made of aluminum or zinc alloy, and they carry price tags of US$50-200. Their selling points, according to Yu, include solidity (they can carry loads of 350 kilograms), durability, and variety of style. The retro-style satin-nickel model, Yu reports, is in vogue this year.

The Taiwan Classy Bed Industrial Co. has rolled out eight or nine new models this year, mostly in retro style, that feature simple lines, verdigris finish, and decorative patterns of aluminum. "The simple styles used to be favored by our British buyers, " reports manager Ivan Lin, "but recently we've found that growing numbers of American buyers have also come to like such styles."

The company now boasts 50 models in its product line, most of them equipped with decorative patterns of cast aluminum that strengthens the products (they can take loads of more than 250 kilograms) while beautifying them. Lin says that his reclaim rate is less than 1%, thanks to strict quality control.

Complete bed sets are priced at US$90-100 FOB. Since many American buyers prefer to buy cheaper base frames from mainland China, Taiwan Classy often sells sets of just head- and footboards at prices of US$60-80 each. The beds are manufactured at the company's factory in Hsinchu city, northern Taiwan; 60% are shipped to the U.S., 30% to the United Kingdom, and 10% to Australia. This year's revenue is projected at US$1 million. (Aug. 2005)