By request, I’m going to profile Ingvar Kamprad today.  Ingvar Kamprad is the founder of IKEA, a store I love.  And despite being the 7th wealthiest man in the world, I had never heard of him until I started reading about self made men for this series.

Ingvar Kamprad was born in 1926 on a small farm in Sweden.  His entrepreneurial life began by selling matches from his bike.  He later branched out into selling fish, seeds, Christmas decorations, and pens and pencils.  At age 17, he received a reward for doing well in school from his father.  He used that reward to start IKEA. [1]

The name IKEA is his own initials, the inital of the farm he grew up on, Elmtaryd, and the initial of the nearby town, Agunnaryd.  He used the seed money he had received to expand his business to include a variety of items.  As his business grew he changed it into a mail order store and delivered the items in a milk truck.  Which is odd because IKEA hardly ships anything from their website, at least to the US anyways.

Kamprad introduced furniture to his business line in 1947.  It was such a hit that in 1951 he discontinued all other products and focused only on furniture.  Two years later he opened the first IKEA showroom.  He opened the showroom to prove to customers that the furniture was high quality, despite being low price.

The idea to design their own furniture was actually forced upon Kamprad by competitors.  His competitors pressured suppliers to boycott IKEA which left Kamprad no choice but to take the designing and manufacturing of the furniture in-house.  One day an employee decided to remove the legs of a table so it would fit in a customer’s car. [2] This led to a change in thinking throughout the designers.  They began changing their designs to be able to ship in flat packaging.  Thus reducing shipping costs, damage during shipping, and eliminating a very expensive part of manufacturing, actually putting the furniture together.  It’s the innovation for which IKEA is known.  Inexpensive, stylish, high quality, and easy to put together furniture.

It’s just plain fun to spend the day walking around IKEA.  And believe me, you can spend the day, cause it’s huge.  But you can’t get lost, they have arrows on the floor that take you from one section to the next.  Just keep following the arrows, you will see everything, and end up back at the beginning.  They have small apartments set up inside the store that are completely designed with IKEA furniture.  So you can really get a feel for how the furniture works in real life.  If you decide to buy something you simply write the item number down.  When you get to the end there is a huge warehouse where you pick up your item.  No need to carry it through the whole store.  There is also a cafe and daycare if you are so inclined.

IKEA is a private company that is owned by a trust controlled by the Kamprad family.  He has not taken the company public because he feels it would slow the decision making progress and the company’s explosive growth. Because the company is private, actual sales figures are hard to come by.

In 1999 Ingvar Kamprad announced “The Big Thank You Event”.  He decided the total of all sales worldwide on one day would be split among the employees.  Every single employee, from the snack bar cashier to the executive, got the exact same bonus from the day’s sales.  Which equaled over a month’s pay for the average employee.

Frugality is Ingvar’s middle name.  He takes the subway to work, but when he drives it’s in a 15 year old Volvo.  (I read somewhere that he traded the Volvo in for a Corolla and decorates his home in IKEA furniture, but I can’t find that site now.) He has been known to say that his idea of luxury is buying the occasional nice shirt.  His only extravagance is a small vineyard which he claims is a very expensive hobby. [4]  He rarely wears suits and when he flies he goes economy class.   When staying in hotels he will replace items from the minibar with drugstore purchases.

The trust and holding companies that technically own IKEA will ensure that the retailer will continue on after Ingvar has passed.  He has stated that one of his three sons will inherit IKEA, but he hasn’t decided which one.

Other self made men in this series:
Warren Buffett
Henry Ford

Sam Walton
Thomas Edison
Oprah Winfrey
Steve Jobs

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