There are currently approximately 2,500 active carpentry businesses in Israel.
This industry includes a wide variety of occupations.
- Industrial Manufacturing- Large quantity manufacturing according to constant designs/ collections, supplying stores and retail chains.
- Individual Production - Usually wooden furniture, mainly chairs, tables, wooden beds, and living room furniture (some carpentries also provide upholstery services).
- Kitchen Carpentry- Inventory production according to pre-determined models. These are usually factories with automatic machinery focusing on individual products in various models and shapes. Most production is of kitchen and bath cabinets, but some also manufacture bedroom closets and built-in closets.
- Construction Carpentry- Manufacturing of crossbars, windows, and doors ( standard doors are usually purchased from factories).
- On-Order Carpentries- usually manufacturing a variety of furniture according to the customer’s demands, and not by inventory of pre-assembled products.
- Do-It-Yourself Carpentries- Carpentries supplying chopped wood according to customer measurements. These carpentries also conduct simple work orders for customers such as shelves, simple cupboards, etc.
- Craftsmen Carpentries- craftsmen manufacturing special designs, usually using unusual wood and sometimes combining other materials.
The carpentry industry is quite competitive; however, some businesses hold a relative advantage by developing specialized areas of expertise, such as planning and building kitchens or manufacturing unique pieces of furniture.
Customer loyalty is relatively high, as long as the customer believes he is associating with a skilled and dependable carpenter, and a satisfied customer will gladly recommend his carpenter to relatives and friends. Many orders are placed following a friend’s recommendation of quality, schedule, and fair price.
Customers: Defining the Target Market and its Size, Market segmenting
The industry is comprised of a number of sub-divisions:
Random customers- for furniture purchase, finishing jobs and remodeling for kitchens, bathrooms, and bedrooms.
Sub-contracting- contractors purchase wood for construction from sub-contracted carpentries, which include fitting the product to the construction and installation at the customer’s site. High importance is credited to on-time performance and flexibility in merchandise supply according to the project’s development stages. Contractors sell apartments with the option to order standard kitchen and bath cabinets according to agreements with a certain carpenter. The customer may choose color and other finishing aspects. Any change or deviation from the standard model requires an additional fee.
Regular Customers- furniture stores and furniture wholesalers.
Vendors in the industry serve the following areas of expertise:
Raw materials-wood: solid wood for furniture production, compressed wood, laminated wood and additional products supplied as plates or chopped wood in various sizes for construction. There are quite a large number of raw material importers, and therefore supply is abundant. Raw materials may also be ordered according to requirement from manufacturers abroad directly.
Equipment and Tool Vendors- Some vendors import machinery for Israel’s wood industry. This includes computerized equipment such as saws, lathes, etc. additional peripheral equipment is abundant in the market in various price ranges and qualities. In addition, tools and equipment required for the business also vary in price and quality.
Future development options
The industry’s competition and decrease in the number of employees have required carpentries to make their manufacturing more efficient by using automatic, more technologically advanced machinery. In addition, alternative wood products such as MDF and plywood are gradually being introduced to the market.
- Professional training- some carpenters study their profession at technological schools or training courses approved by the Ministry of Labor and Welfare. Some carpenters began practicing as a hobby, and gradually learned the profession, and some are former carpentry or factory employees.
- Investment- the investment in an average factory is relatively high.
- Licensing is required from local authorities.
Human resources include professional carpenters, professional and non-professional equipment operators, and apprentices for performing simple work especially in the initial processing of raw materials and finishing.
A professional carpenter specializes in efficient utilization of the raw materials, planning work stages, fitting parts to each other, correct and efficient usage of the gluing process, and product finishing.
Apprentices perform wood preparation tasks: serving raw materials, initial sawing and finishing work: cleaning, packaging, and sanding.
The number of employees at an average carpentry ranges between 3-10 employees.
Industry revenue and profitability
Data below is per worker for the year 2003 (in thousand NIS)
Raw profit in furniture carpentry 253-196
Revenue in sub contracting – 394-473
The calculation refers to professional employees only (not including apprentices and administrative staff).
Typical Terms of Payment
Most transactions are conducted with other business owners: retailers and wholesalers in the furniture market or sub-contracting in building. In these cases, payment is rendered upon reception of an invoice according to customary credit terms: EOM +15 to EOM +90.
In the contracting business, there may be more distant payment terms. Random work or private customer jobs are conducted when the customer pays an advance for the work and the rest upon delivery/installation. The rest is paid in cash, postponed checks, or credit card. Inventory product sales are conducted in cash, postponed checks, or credit card. Payment morality in the industry is not very high.
Business insurance (for the structure, content, and inventory), third party insurance, employer’s liability insurance, and loss of income insurance. In addition to the above, an insurance agent should be consulted in regards to the need for additional insurance
The Furniture Makers’ Association in Israel (near the Industrialist’s Association), P.O. box 50022 Tel-Aviv 68125. Phone: 03-5198846/7, Fax: 03-5198717.
Business proposals, free internet advertisement, information, and guidance.
The Ministry of Labor and Welfare- professional training. Derech Petach Tikvah 86, Tel Aviv Phone: 03-5863130.