For many businesses, success does not come without taking some risk.
While some leaps of faith may pay off, others may be costly to a company’s bottom line.
To help decide when it’s worth it, we spoke to Deborah Drexler, co-founder of Matt Blatt, the Australian furniture retailer, about some of the biggest risks she took with her business.
“There were a couple of key turning points along the way, major gambles we took when we just didn’t know whether they’d pay off,” she says.
Today, Matt Blatt is one of Australia’s go-to furniture destinations with 14 showrooms across Australia.
Here are the five best risks Drexler has taken to date.
Getting on eBay early
“Most people don’t know that Matt Blatt began as a small-time manufacturer of office furniture, and very early on we discovered a new platform – eBay – and chose to take a chance on it,” she says.
“I think we were actually the first Australian furniture retailer selling on eBay back then, and the concept of going directly to our customers in that way was really new, and somewhat daunting.
“It turned out to be a great strategy, as we were able to build our own database of customers, deal with them directly and constantly add new products.”
Jumping into importing
“Right from the outset, we’ve always had a flexible approach and an appetite for risk, knowing that any decision we took could change the entire direction of the business,” says Drexler.
“One of those moments was when we opted to get out of local manufacturing and move into importing.
“At the time it had become especially tough to compete with the volume of overseas imports flooding the local market; and continuing to run our small factory became untenable. We literally packed it up overnight, held an auction to sell our machinery and we were out of the manufacturing game, and into furniture importing, just like that.”
“Moving on from our eBay days, deciding to build our own website was a major move,” she says.
“While we’d have complete control, we didn’t know how many people locally were ready to make major furniture purchases online, or how we were going to manage it from a stock control point and warehousing point of view.
“When mattblatt.com.au came to life most of our competitors weren’t online yet, so we stood out, but we also spent plenty of time talking customers through the process. They would call and need to be walked through how to place an online order.”
Buying into bricks and mortar
“Moving to a larger warehouse, and establishing a much bigger showroom, was a major risk.
“Besides the additional property costs, we were then able to carry more stock, and to have more staff selling on the floor – all of which was a gamble.
“However, we believed – and still do – that furniture is something people like to see, experience, touch, measure, and sit on.”
“When it comes to sourcing new products, it’s really about instincts,” says Drexler.
“There’s never a guarantee when we’re choosing a new range. We don’t know for whether something I might fall in love with on a buying trip will have the same impact on our customers.”
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