IKEA’s Humble Beginnings

Although you’ve most likely never heard of Ingvar Kamprad, you’ve probably heard of his company. You may have even shopped there at one time or another. Kamprad is the founder of IKEA, a popular inexpensive furniture and home goods store. Kamprad, who was born in Sweden in 1926, showed his aptitude for business at a very early age. After discovering he could buy matches in bulk and sell them to his neighbors individually for a profit, he started selling matches from his bike. Over the years, he expanded his selection to include various items, including Christmas decorations, seeds, and pens and pencils.

Kamprad was born in 1943 at his uncle’s kitchen table. The company sold assorted household items, including wallets, watches and stockings, and delivered them to area customers using a milk delivery van (About.com). Kamprad added furniture to his offerings in 1947, providing the foundation for all future IKEA stores. He used products from local companies to keep his costs low. The first showroom opened in 1953 and focused solely on furniture.

IKEA focuses on inexpensive (yet durable) furnishings that are packed flat and can be assembled easily. Packing the furniture flat saves money during shipping and allows customers to get their furniture home without having to pay for an expensive delivery.

Although Kamprad has a net worth of about $23 billion, he is notoriously frugal. He travels economy, drives an old Volvo and even recycles teabags. He challenges his employees to be frugal as well, urging them to write on both sides of each piece of paper and encouraging furniture designers to build economical and sturdy furnishings. Today, IKEA has more than 250 stores in 25 countries worldwide.

The IK in IKEA

Ingvar Kamprad almost single-handedly turned his furniture company into a global conglomerate. What started out as a venture to sell elegant furniture at reasonable prices became one of the world’s largest companies in its industry. Few success stories are as intriguing or inspiring as that of IKEA.

When he opened the business in 1943, 17-year-old Ingvar Feodor Kamprad wanted to give average families access to quality furniture products at affordable prices. He did this by shipping the furniture unassembled in flat-packs. The DIY concept eliminated the need for assembly labor. Also, the packaging policy cost him less in shipping while allowing him to ship more items at any one time. These lowered business costs and allowed him to keep his wares at bargain basement prices while maintaining profitability.

Kamprad’s methods revolutionized the way furniture and other retail items were sold. When his suppliers began to shut him out in protest of his low prices, the never-say-die entrepreneur launched his own production line to stay in the game. He kept IKEA costs low in order for his prices to remain low, forcing others in the business to follow suit.

Today, he pushes on with full control of a company that sells furniture to at least ten percent of European households. Its success has kept him high on Forbes’ list of billionaires year after year. Yet he continues to maintain a low profile and prudent lifestyle which most likely keeps him and his company grounded.

Kamprad’s business philosophies stemmed from his Swedish beginnings in a poor and struggling farming community. His hard work and frugality continues to shape the beliefs and goals of his company today.