Distressed office sales the key to unlocking Blue Chip Furniture’s success
“Spot the opportunity and the cash will follow,” Matthew Amien, Blue Chip Furniture co-founder.
For Matthew Amien and Aydon Carstens, their lucky business break came from a very unlikely source: Covid-19. Having both been students and spending a few months at home during lockdown, their “aha” moment arrived when they came upon the idea of buying office furniture from distressed businesses at next to nothing. With so many businesses either closing down or moving to work from home, the pair knew that there would be offices full of potential stock just waiting to be bought and resold to businesses in industries that weren’t so negatively affected by the pandemic.
Finding opportunities were there seemed to be none
Using free platforms like Facebook Marketplace and Gumtree to source stock, the pair were able to find sale items and quickly built up a small stockpile. They would buy furniture from a business that had no need for it or was in the process of winding down, and wanted to get rid of it quickly, and then sell the refurbished furniture to new or established businesses looking to kit out their premises. Every time the team did this, they managed to make a tidy return that could be pumped back into the business for more stock, and more opportunity.
Not long afterwards, Matthew and Ayden heard that several businesses needed to move out of the Cape Town Convention Centre (CTICC) as it was being converted into a temporary Covid-19 hospital. The pair was in the right place at the right time and bought as much stock as they could: a few hundred desks and chairs, and some cabinets and pedestals. This was a massive win for their new business, as they had plenty of stock to sell – the only problem was, they had nowhere to store it.
Setting up shop
Fate smiled on them again as they were able to secure a space on the Foreshore near the CTICC. They were able to use it as a showroom, displaying furniture stacked nearly to the ceiling.
With a deep inventory, Matthew set about using free online marketing tools to promote their product. This time they focused on businesses with staff who were working from home. They sold 20 desks, 20 filing cabinets and 20 chairs in one order alone, which gave the business a well-timed cash injection while also opening the pair’s eyes to the size of the market opportunity.
Despite their initial success, their early days were still a daily hustle to figure out the best ways of working and finding the next opportunity. Stock was delivered in Ayden’s Polo and the pair worked day and night to find buyers for their furniture to get the business off the ground.
The team gained valuable experience early on by getting close to the office furniture sector, and Matthew and Ayden picked up a lot of intel about the industry. They learned what makes a good or bad chair, what the key things are to look for when pricing the products and what makes a quick seller. They learned on the job, and they learned fast, always excited to put these learnings into practice for their business.
But, when the lease showroom in the foreshore ended without warning, the Blue Chip team had to move out immediately and make another plan, and make it quickly.
Family comes to the rescue
Luckily Matthew’s grandparents came to the rescue and offered to store all the stock at their home in Tokai, Cape Town.
Truckloads of furniture were delivered to the suburbs and every possible space was used to store stock: the garage, garden and even the driveway were filled with furniture! They piled chairs and desks into the lounge and bedrooms and, by the time they had unpacked, every corner of the house was full of office furniture.
This set-up couldn’t last – but a big order from a business moving into nearby Westlake Business Park gave them the cash injection they needed. The next hurdle was their credit record: potential landlords weren’t too keen on backing two 23 year olds with no track record.
Fortunately, Daniel Botha from Annenburg Property took a shine to the pair and helped them find their first office: a 500 sqm industrial space that they converted into a showroom. When it was sold, the business moved to its current premises in Salt River, Cape Town. The 1000 sqm space serves as a showroom and stockroom, and they’ve also found a factory in nearby Woodstock to manufacture their own range of office furniture.
Launching their own line of office furniture
While buying and selling second-hand furniture was an excellent way into the industry, Matthew and Ayden soon realised that there was a gap in the market for quality, well-priced, new furniture. They looked for experienced welders and carpenters and began producing their own line.
Now settled and with two revenue streams, Matthew and Ayden focused on building up their bank of contacts and strengthening relationships – something Matthew believes is the backbone to any business.
“A lot of our success so far has to do with us being young and people being nice and giving us a shot,” says Matthew. “As soon as we get the shot, we will not let people down and we maintain our relationships with our network. It’s key to find the person at the centre of a network, as they can introduce you to others. For instance, one of our contacts has been in the industry for 30 years, and he introduced us to 13 designers. We make a point of building these relationships and will even fly up to Joburg for a coffee if necessary.”
This approach has led them to meet architects, interior designers and key people in large corporates. Their connections with designers mean that furniture from Blue Chip is specced into the quotes for new spaces. This has opened many doors and has helped them quickly scale their business.
Of course, this comes with its own set of problems. While business was booming, the teams were working through the night and burning out. As Matthew says, it’s as dangerous as not having any work, as you can easily lose your business if you don’t deliver on time and provide top quality.
To counteract this, they are interviewing for 10 more people and now have factory heads for the carpentry and steel and metalworks who oversee the rest of the staff making Blue Chip Furniture.
Blue Chip is only a few years old and has grown in leaps and bounds. They now need to learn how to be sustainable and “not explode by growing too fast”. They are also watching the books very closely and have a clear view of costs, revenue and profits.
Success is a mindset and opportunity is around every corner
Reflecting on their success, Matthew advises other potential business owners to be creative, but also know how to manage the risks. In their partnership, says Matthew, he’s the creative one, while Ayden is more conservative and realistic about risks, the perfect balance. He also believes it is important to spot the opportunities and unlock revenue avenues, even when there seem to be none. “If you can see the opportunity, the money will flow.”
A business that started out with two friends buying second-hand furniture on Gumtree has swivelled into a true success story to be proud of.