IKEA’s Hidden Success Formula: How Ingvar Kamprad Changed Furniture Forever

IKEA is more than a place to buy flat-pack sofas and meatballs—it’s a retail revolution. Today, our planet is home to around 340 billion trees. Here’s a jaw-dropping fact: every year, IKEA uses about 1% of these trees. That’s 30 billion trees used each year, or 963 trees every second, turned into products found in homes worldwide. But the giant blue-and-yellow warehouse didn’t start as a global powerhouse. Its journey began with a young boy and a handful of matchboxes.

Let’s uncover how Ingvar Kamprad, the child behind IKEA, built a company that changed the world of furniture.

The Humble Beginnings

Early Childhood of Ingvar Kamprad

Ingvar Kamprad wasn’t a likely business mogul. He struggled with dyslexia, making even the simplest tasks in school tougher than most kids faced. Numbers and names blurred together, but this didn’t hold Ingvar back. In fact, it forced him to think differently.

At just six years old, Ingvar got his first taste of business. His grandmother saw something unique in him and handed him 88 Swedish cents. With this small amount, young Ingvar bought 100 boxes of matches to resell.

First Business: Selling Matches

His grandmother became his first customer, buying a box for three cents. Neighbors followed, and Ingvar’s stash of matches sold out. He’d taken a tiny investment and tripled it in value. It wasn’t a fortune, but it lit a fire in him for buying low and selling higher.

This lesson from matchboxes became the backbone of his business mind. He learned early that resourcefulness and reinvesting—even the smallest gains—make a business grow.

Developing Entrepreneurial Skills in Youth

As he grew up, Ingvar didn’t spend his extra cash right away. Each time he doubled or tripled what he had, he put the profits back into new goods to sell. Ingvar took on more household items: pens, wallets, and other handy things, never just for fun—always to make his next move bigger.

• Started small, invested profits
• Sold practical household items
• Focused on reinvestment
• Built relationships with repeat customers
• Learned from every transaction

These traits—discipline, an eye for opportunity, and reinvesting—set him apart from most kids his age.

Dyslexia Turned Into Strength

Living with dyslexia meant that reading and remembering details was challenging. Ingvar often forgot names and struggled to follow lessons. Still, he used the classroom as a mini-market, selling pens, watches, and belts to friends.

Dyslexia made school difficult, but it taught him to find new ways to solve problems. He learned the value of simplification, which influenced how IKEA would later name products and communicate with customers across the world. Instead of seeing dyslexia as a weakness, he made it his advantage.

The Birth of IKEA: A Virtual Trading Venture

Registration and Naming

At just 17, after finishing school, his father rewarded him with enough money to register a trading company. In 1943, IKEA was born. The name combined his initials (Ingvar Kamprad), his family farm (Elmtaryd – “E”), and his village (Agunnaryd – “A”).

This wasn’t a typical shop. There was no storefront, just a mail-order system handled from a small shed. Ingvar focused on delivery, keeping overhead low and options flexible.

Early Product Lines

He sold what he knew best: wallets, pens, frames, and small household items. The catalog grew, but there was one big catch—everyone else could sell these items too. Success didn’t just come from what he sold, but how he sold it.

Cracking the Pricing Puzzle

Competition was fierce. Mail-order catalogs were common, but many sold the same goods at high prices, even though factory costs were low. Ingvar grew obsessed with this.

How did a pen made for one cent sell for ten cents in the store? He set out to figure it out.

1. Compared factory prices to store prices for common items
2. Tracked every step of how products left the factory and reached stores
3. Realized distribution and transport costs were the real price boosters
4. Decided that controlling distribution was key—not just slashing product prices

Ingvar figured out that saving on moving and delivering goods, not just lowering costs from suppliers, could give IKEA the price edge.

Seizing the Post-War Opportunity

After World War II, Sweden saw a housing boom. The government built thousands of new homes, pushing up demand for furniture at prices people could afford.

Sensing the shift, Ingvar added furniture to his product line in 1948. He began by sourcing cheap local furniture, selling it for a profit, and gaining a reputation for making home setups cheaper and easier.

Naming Products the Ingvar Way

Faced with more complex items, and struggling with traditional catalog codes due to dyslexia, Ingvar made a simple change: give each product a unique, memorable Swedish name. No confusing strings of numbers. Instead, customers and staff remembered ordered items easily.

Names like “Billy” or “Malm” stood out, making it simple to find and buy the right item. This low-tech solution gave IKEA’s catalog a personal feel and made shopping easier for everyone—not just Ingvar.

Tackling the Mail Order Furniture Challenge

The mail-order market got messy. Companies undercut each other’s prices, sometimes selling poor-quality products just to stay cheap. Customers started to distrust mail-order offers.

Ingvar’s solution was bold. In 1953, he opened the first physical IKEA store.

Benefits of the new store:

• Customers saw and touched real furniture before buying
• Delivery costs dropped as buyers could take items home directly
• Trust improved, since people could judge quality themselves

By blending catalog shopping with face-to-face retail, IKEA set a new standard.

IKEA’s First Store Launches With a Bang

Ingvar’s strategy worked better than expected. The store’s opening saw nearly 1,000 people lining up outside. The postwar home-building spree meant families everywhere needed ways to furnish quickly and cheaply.

Ingvar didn’t stop with furniture. He added attractions like a pool, turning the store into a local tourist spot.

Unexpected success. The store wasn’t just a shopping destination—it was a place families wanted to visit, making IKEA a tourist hotspot and boosting sales through fun and convenience.

Find more on IKEA’s early innovation on the ZM TV YouTube channel.

The Furniture Dealers’ Pushback

Traditional furniture retailers weren’t happy about this newcomer undercutting their prices. Starting in the 1950s, they tried several tactics to squeeze IKEA out:

• Pushed for bans on IKEA’s participation in trade fairs
• Pushed for bans on publishing low prices in catalogs
• Pressured local suppliers to cut off IKEA’s supply

IKEA struck back. When locked out of trade fairs, they organized their own. When suppliers stopped selling, Ingvar found a way to get them back or went abroad for new partners.

Timeline of obstacles:

• 1950: Bans and opposition start
• 1953: First store launches, new buying options appear
• 1954–1955: Supplier pressure mounts; IKEA adapts with new strategies

Breaking the Boycott

Instead of giving in, Ingvar went on the offensive. While most retailers paid suppliers after three months, IKEA offered payment within 10 days. This motivated suppliers to resume business—even working quietly at night to keep up the flow.

With supplier threats ongoing, IKEA started creating its own unique furniture designs and imported chairs from Poland—something other Swedish retailers hadn’t considered. This move gave IKEA its own products and freed it from relying on local suppliers alone.

Strategic thinking and fearless experimentation helped Ingvar survive and thrive.

The Flat-Pack Revolution

One day, a customer tried to fit an IKEA table into their car. It wouldn’t go. An employee suggested removing the table legs—simple, but game-changing.

Ingvar seized the idea. By making furniture that could be assembled at home, IKEA changed how people bought, transported, and used products.

Benefits of flat-pack furniture:

1. Cheaper and easier to ship in smaller boxes
2. Less damage during shipping and storage
3. Customers could take purchases home immediately, no wait times
4. Furniture assembly gave a sense of ownership and pride
5. Lower costs meant lower prices for everyone

People started calling this emotional bond the “IKEA Effect”—the feeling you get from building something with your own hands.

Growing IKEA’s Store Network and Shopper Experience

IKEA’s next move was just as bold. A huge, three-story store—equal to eight football fields—opened outside Stockholm. Ingvar tested shopper behavior and built a unique layout: one entrance, one exit, and a long, winding path that exposed customers to everything on offer.

Not only did this design make sure customers saw every product, but it encouraged them to linger and buy things they didn’t plan for. However, the store would be empty at lunch—everyone left for meals.

Ingvar’s fix? He installed a restaurant right inside the store. It worked perfectly. People relaxed, ate, and then went back to shopping. This kept shoppers in the store longer and made IKEA a weekend outing destination for families.

Customer experience innovations kept the company ahead of competitors.

The Crowd That Launched a Legend

In 1965, a new IKEA store set a remarkable record—18,000 people visited on its first day. Throughout the 1970s, stores opened rapidly, turning IKEA into a household name not just in Sweden, but all over Europe.

Its focus on price, value, and unique experiences gave families a reason to choose IKEA every time they needed something for the home.

Planning for the Future: A Complicated Inheritance

Ingvar wanted IKEA to stay in the family. But Sweden’s high inheritance taxes threatened that dream. Passing ownership to his children would mean losing a huge chunk of the company to taxes.

To avoid this, Ingvar hired a team of lawyers worldwide. Over seven years, they built a complex network of shell companies, trusts, and foundations in tax-friendly countries. The strategy worked: IKEA’s ownership structure became so complicated that taxing inheritance profits became nearly impossible.

But this planning had a cost. Critics accused IKEA of tax evasion.

“IKEA’s legal maze kept the company in the family but led to years of controversy and scrutiny.”

Facing Ethical Challenges

In the 1980s, another challenge arose. Some Eastern German factories building IKEA furniture used forced labor from prison inmates. When this came to light, public backlash followed.

IKEA’s leadership investigated and issued a public apology. They took steps to clean up their supply chain and repair the damage. The ordeal reminded IKEA to watch every step of its operations and left a mark on the company’s reputation.

IKEA Goes Global

By 1990, IKEA had added more than 70 new stores. Its push into new countries expanded its influence. By 2008, IKEA had become the world’s largest furniture company.

As of today, 473 IKEA stores operate worldwide, with over 2,000 new products launched every year. True to Ingvar’s original solution for dyslexia, each product still gets a memorable Swedish name, making the shopping experience personal and unique.

IKEA’s Core Success Factors

How did a boy with dyslexia take a handful of matches and build a global dynasty? Here’s what set IKEA apart:

• Early habit of reinvesting profits from childhood
• Unique product naming that made shopping easier
• Obsessive focus on saving distribution and shipping costs
• Flat-pack furniture that changed the industry
• Mix of catalog and in-store retailing
• Quick, strategic responses to competitor attacks
• Creative store layouts and comprehensive shopping experiences
• Complex corporate planning to ensure family control
• Willingness to admit and fix mistakes

Other furniture brands tried to compete on price alone, but Ingvar always went a step further—changing how people shop, furnish, and even build their own homes.

Ingvar Kamprad’s Lasting Legacy

Ingvar Kamprad passed away in 2018 at the age of 91, leaving behind a brand that’s instantly recognizable on every continent. His influence shaped not only the way we buy furniture, but how we think about value, quality, and design.

IKEA remains a symbol of practical design, innovation, and perseverance. Every piece of flat-pack furniture carries a bit of Ingvar’s story—a reminder that small ideas can transform the world, and that even the simplest solutions can have the biggest impact.

For more insights and stories like this, check out the ZM TV YouTube channel for deep dives into business, history, and innovation.