Leo D'Angelo Fisher Columnist

Leo covers management and leadership issues, business trends and corporate strategy. He is a former senior business writer at The Bulletin and a former host of The Business Hour on 3AW.

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Familiar product, novel marketing

Published 31 March 2011 05:01, Updated 13 April 2011 11:26

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The Ramler family has been in the furniture business for more than 60 years and its progress has mirrored shifting trends in manufacturing, retailing and consumer behaviour. And, of course, the arrival of the internet.

The late Harry Ramler started his small business in the Melbourne suburb of Cheltenham in 1950 making telephone tables. By the 1990s, Harry’s sons Garry and Paul were leading the business and Ramler Furniture had become Australia’s largest outdoor furniture maker. The company debuted on BRW’s Fast 100 in 1998 – the archetypal “overnight success”.

The third-generation Ramler to be bitten by the furniture bug – Paul’s son, Dean Ramler – spent many school holidays in the family business and later started his own concern: online furniture retailer Milan Direct, which debuted on the BRW Fast Starters list in 2010.

“I am extremely proud of Dean and his achievements,” Paul says. The feeling is mutual. “My dad was my mentor,” Dean says. “He gave me the best education by allowing me to work for him.”

Dean co-founded Milan Direct with business partner Ruslan Kogan in 2007 to sell replica designer furniture. Just two years later they expanded the concept to Britain.

Although the start-up was only four years ago, Kogan recalls the scepticism. “When we told friends that we were going to sell furniture online, they scoffed, ‘as if anyone will buy furniture online without seeing it’.”

But Kogan knew better. He had already started online electrical retailer Kogan Technologies the year before, a Fast Starters business in 2009 and 2010. “Our customers don’t care about talking to sales people or seeing the product; they just care about price and service.”

Over the past two full financial years, revenue grew 47 per cent from $3.6 million in 2008-09 to $5.3 million in 2009-10. Repeat business accounts for 30 per cent to 40 per cent of sales.

Milan Direct’s business model is strictly minimalist: it has just seven employees at its Albert Park office in Melbourne and outsources manufacturing, warehousing and deliveries. Milan Direct services all of Australia and the British operation from its Melbourne headquarters. “We don’t have a single employee in the UK,” Dean says. “All operations are run out of Australia and the aim is to service every EU [European Union] economy.”

Milan has few staff – the youngest is 19, the founders are the oldest at 28 – and everyone is expected to contribute to the success of the business. “It’s not how old you are or how long you’ve been in the company, it’s the value you bring to the company that counts,” Kogan says.

Milan Direct recently expanded into rugs when a customer service employee provided Ramler and Kogan with a report that chronicled inquiries from customers seeking rugs.

Manufacturing overseas enables Milan Direct to keep prices down by up to 70 per cent. Its entire catalogue is made in China. “I’d prefer to see our furniture manufactured in Australia, but Australia just isn’t cost-effective for mass-produced furniture any more,” Dean says. “The price in China is unbeatable and the quality is fantastic.”

Ramler and Kogan visit their suppliers in China six times a year. Ramler has worked part-time in the family business for 10 years, so he knows how to oversee quality management and manufacturing.

“I personally couldn’t tell one chair from another but Dean can get on the [factory] floor and show workers how to do it better,” Kogan says. “He’s very hands-on.”

Dean’s father is not surprised. “We both have the love of furniture but he’s been able to translate that into a business that’s right for him and his market,” he says.

These days, Ramler Furniture is a “total furniture solutions” provider – that includes design, project management and installation – to clients such as McDonald’s, Village Cinemas, Sheraton and Westin hotels and Westfield.

Ramler Furniture no longer manufactures and almost half of its revenue – which Paul Ramler declines to disclose – is from the United States. His bother Garry Ramler runs the US operation from New York. “We are a totally different business,” Paul says.

Everything changed for Ramler Furniture when it won the contract as official furniture supplier to the Sydney Olympics and later the Melbourne Commonwealth Games. Ramler is also the official furniture supplier for the athletes’ village at the London Olympics.

The two Ramler businesses will shortly enter into their first joint venture. Ramler Furniture will subcontract Milan Direct to sell 500,000 items after the London games. It’s already been dubbed as “the UK’s greatest garage sale”.

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