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From eBay with love

Oak Furniture Land owner Jason Bannister tells Kirsty Hewitt how he turned an eBay business into a multi-million company

It seems not a week goes by without news of a well-known retailer collapsing but one entrepreneur is bucking the trend and opening new shops on a monthly basis.

Jason Bannister, who hails from Burnley, founded JB Global in 2002 and is probably most well known for Oak Furniture Land, which sells hardwood furniture such as wardrobes, side tables and bed frames.

JB Global has two other retail operations - The Online Furniture Shop and OFL Home - and it has its own logistics company too.

In the year ending 30 September 2012 the firm turned over £85 million, which was an increase of 140 per cent on the £34 million reported the previous year. Pre-tax profit was up from £3.9 million to £9.2 million. The rise followed the launch of retail outlets.

The figures speak for themselves: Bannister is clearly doing something right. But where did it all start?

In 2004 Bannister worked as a sales rep for a retail company and spent a lot of time on the road. On one of his trips he spotted an advert for Mexican pine. He says that he decided to buy the wood using the £10,000 he had raised via a remortgage that was supposed to pay for an extension for his house.

“I didn’t have a clue what I was going to do with the pine but it was a good price and I knew I was a good salesman and that I would be able to sell it,” he explains.

It took about six months for the pine to arrive but Bannister was too busy with work to sell it, so he stored it in a chicken shed until he had more time to deal with it.

Towards the end of the year Bannister decided to flog on it on eBay.

“It sold fantastically well; it was an unhappy accident. I sold it at a very good price and people were very happy with the quality.”

The entrepreneur, who’s a diehard Burnley Football Club fan, decided to have another go at selling similar items so he went to India in a bid to source more pine. He found a supplier who started making furniture for him, which he then sold on eBay.

By the end of 2006, JB Global had become eBay UK's largest retailer by turnover. Spurred on by the success of his eBay store, Bannister decided to open a standalone website called Oak Furniture Land.

Bannister says that his best deal was one he agreed while on a visit to a trade show in China to source furniture. Most of the furniture at the shows was expensive but he happened to stumble across a stall displaying wicker baskets. The stall also had one piece of furniture on display: a small wooden cube of nest tables.

He got an interpreter to ask the stall holder what other furniture he made and was swiftly handed a catalogue.

“He started giving me prices and they were about a quarter of the price of anything else that I had seen yet the quality looked great. So I asked for price list but he wouldn’t give me one but I sat with him and wrote every single price down.”

After a long flight back to the UK, Bannister placed an order for a container of furniture and returned to China three months later to check the quality. However, on this trip the manufacturer told him that he hadn’t actually made furniture before and had only ever created wicker baskets but when he secured Bannister’s order, he employed craftsmen to complete it.

“They had taught themselves how to make furniture and got craftsmen in to do this because they spotted potential in me. I was really small at that time but the prices we were paying meant I could bring it to the UK and offer great quality products at an unbelievable price. That was my best ever deal.”

Bannister paid around £8,000 for the container of furniture and made approximately £30,000 as a result. He says that he still works with the guy, who is now the biggest furniture manufacturer in his region of China.

“He is a great supplier and a good family friend of mine now,too. He employs about 800 people and pretty much only makes furniture for me.

“We have used the prices he originally gave me in the expo as a barometer in China and we still do to this day to prevent any new suppliers from overcharging us.

“His pricing has always been really good and this was the starting point. Obviously, his prices have gone up in the meantime with the cost of living but we have a true grasp on what prices we should be paying for things. It’s a win-win situation.”

Bannister employs approximately 600 people and this figure is set to grow over the coming years as he rolls out new stores as part of his expansion strategy.

In 2009 Oak Furniture Land launched its first retail outlet in Cheltenham and Bannister is planning to open a shop a month for the next three years.

He says that the decision to open the company’s first outlet was as a result of customer demand, as he was constantly asked if there was an Oak Furniture Land shop.

Bannister initially thought opening a store would take business away from the internet operations but says that it just added to turnover.

“It was fresh turnover, it was incremental business so if we opened a shop that did £3 million, yet were making £30 million via the net then we were all of a sudden doing £33 million. Every time we opened another shop the turnover went up.

“People who will not buy on the net are coming into our shops. So they are researching on the net and doing all the legwork and then going into shops to confirm the furniture is as good as we say it is and then they buy it.”

So how is Bannister able to keep his costs down in order to compete with rival companies?

“We do everything in-house. The overseas manufacturers we use are an independent company but they pretty much just work for us. I’ll give them a design and we bash out a price together. They then make the furniture and it’s imported into the UK where we market it, retail it and deliver it.

“This means we keep all our overheads as low as they can possibly go as a business and it means that we have a fantastic product that customers can buy for half the price of things that aren’t as good as other retailers - and that is simply because the other retailers have got lots and lots of overheads and people in the middle of the run that they have to pay for doing various things.

“It’s like that old saying: gold for the price of silver. I’m not saying what I sell is gold for the price of silver but because we make a reasonable margin and sell it at a level that doesn’t include lots of mark-ups then it’s not far off.”

So what’s next?

Bannister says that he is hoping to generate sales of around £150 million for the year ending September 2013.

“I’d be disappointed if we didn’t get it. We will probably have in the region of 45 stores by that stage.”

The businessman is also rolling out bedding concessions known as OFL Sleep Shops within the Oak Furniture Land stores. He says that the idea behind this is to provide mattresses for the bed frames the stores already sell. He aims to “take the confusion out of bed buying” and says that he is also selling sofas in some stores to see whether it is worth expanding in to that area.

Bannister, who owns a 100 per cent stake in JB Global, also says that he isn’t planning to bring any shareholders on board because he's never “really needed an outside influence” and doesn't need to give any equity away.

“I do like the comfort of knowing that I have the final say. Sometimes there is a bit of pressure and I wish there was someone above me who I could go crying to so they can make a decision for me but ultimately, so far, so good.”

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