So about those TPS reports…
By: Wailin Wong
Tags: Thedistance, Office Furniture, Work

Transcript

WAILIN: Twenty-five years ago, Tom Quinlan had just moved to Milwaukee and was looking for a new job after almost 20 years working at a Chicago company that sold office furniture. One day, he ended up on the phone with someone back in Chicago that he knew through his old job.

TOM: Someone asked me, he said: “I’ve got a bunch of furniture here. Would you be interested in taking it?” And I said, “Oh, okay.” So I, I drove to Chicago and they walked me back into this warehouse and I think there was like a hundred chairs, and the guy goes, you know, “Will you take these hundred chairs for me?”

WAILIN: They were red guest chairs, the kind you might find in a reception area or a waiting room, and they were made by Steelcase, a big office furniture manufacturer. Tom’s old job had been managing the warehouse of a Steelcase dealer, and he knew they were well-made chairs.

TOM: And I said: “Okay, I don’t have to pay for these hundred chairs?” “No, just take ’em because it’s gonna cost us more money to throw ’em out than it’s worth. We just want you to take ‘em.” Oh, okay. I think I can probably sell those chairs.

WAILIN: Tom loaded the hundred red chairs into his rental truck and put them all in the basement of the two-flat in Milwaukee that he and his wife, Suzanne, were renting.

TOM: And then, you know, Suzanne, who came home from work and she went down to the basement and she said, “What the hell are you doing with all these damn chairs? What’s gotten into — that’s crazy!”

WAILIN: What Tom did with all those damn chairs was start a business called Office Furniture Resources, or OFR. This year, it celebrates 25 years of buying and selling used office furniture, everything from cubicle panels to credenzas to filling cabinets to carpets. If cubicle walls could talk, what stories would they tell? Well, we’ve got one of those stories today, and you’ll hear it on The Distance, a podcast about long-running businesses. I’m Wailin Wong. The Distance is a production of Basecamp. Introducing the new Basecamp Three. Basecamp is everything any team needs to stay on the same page about whatever they’re working on. We use Basecamp to run our show, and I should mention that OFR also uses Basecamp. As a general rule, we do not feature Basecamp customers on The Distance. This was an oversight on my part and I apologize for it. We’re still sharing this story because I really like it. So let’s get back to Tom Quinlan and the hundred red chairs in his basement.

TOM: I said, “You know, there’s an opportunity I just couldn’t say no to, and I think I can sell these chairs.” And then, at the same time, I had a friend who lived in Milwaukee. She had some time on her hands, and I said, I think if I taught her what I know about furniture, I bet you she’s gonna be able to go around to local businesses and sell these chairs.

WAILIN: That friend was Nancy Kidd.

NANCY: My name is Nancy Kidd, and I am employee number one.

WAILIN: At the time, Nancy had a bunch of different jobs, like working at the local YMCA and selling ads for a fitness publication. Tom put two of the red chairs in her car and told her if you sell these, you can keep half the proceeds.

NANCY: I went into this print shop and I actually had to get some printing done and I said, “Hmm, you guys don’t have any place to sit down in here while you’re waiting.” And they said, “Oh yeah we know, we should get some chairs.” And I said, “I have a couple in my car.” I said, “These are Steelcase 454 guest chairs. They weigh about 75 pounds each. They are built like a brick shithouse and they’re gonna be 75 bucks each.” And he said, “I’ll take ‘em.” I said great. So, took them out of the car and they gave me 150 bucks. I drove over to Tom and I was just like—that was so much money to me. When he gave me that 75 dollars, I was like oh my God. Whatever. I’ll do whatever.

WAILIN: That was how it all started. Tom and Nancy sat in the basement — Tom on a big leather chair, Nancy on a little green chair that belonged to Tom’s toddler son—and they worked the phone.

NANCY: I would call people and I would say, um, “Hey you know, I was wondering if you had any 30-inch deep cantilevers. Oh, you do?” And Tom would nod and say, “How much?” And he’d write something on a paper and I’d say, “How much are you asking for those? Oh, 5 percent? Five cents on the dollar? The list price? Oh yeah, okay, um.” And he would, like, hand signal and tell me what to say and do and I would say it and do it and buy stuff.

WAILIN: It was just Tom and Nancy in those days, so Tom would drive around picking up furniture himself.

TOM: We would go into a building and we would buy a floor of furniture and at the time, back 25 years ago, we didn’t really have a warehouse or a facility to bring it out, so we would try and flip it. So we would take it out of the building and then try to resell it to another dealer, used furniture company that’s in our business, and that business could be in Chicago or it could be in California, Texas, Ohio. It didn’t really matter.

WAILIN: Eventually, OFR got big enough that Tom needed to rent a warehouse in Milwaukee. Today, the business has locations in Milwaukee, Madison, St. Louis and Chicago. When companies are looking to get rid of their office furniture, usually because they’re upgrading or moving, OFR comes in, takes everything apart and hauls it away. It then resells those used chairs and desks, either to another furniture dealer, to a business that’s looking for office furniture, or to shoppers that walk into an OFR retail store. Whenever big corporations jump on new trends in office furniture, like going from tall cubicles to more open spaces with lower walls, it’s good business for OFR.

TOM : You have the Fortune 100 companies. All this product that they decide it doesn’t work for them, trickles down to the rest of us. And there’s a lot of the rest of us. We don’t sell used furniture to the Fortune 100 companies. We take their furniture, we work with them because they have to get rid of it, and then we basically trickle it down to small, mid-sized firms, 50 to 200 employees, that they don’t have the budget but they have the need. And that’s our typical customer profile. A lot of people think that we get the furniture from companies that are going under or are bankrupt or out of business. That’s not the case at all. Ninety-nine percent of the furniture that we get are from companies that are redoing their space for whatever reason.

WAILIN: The process of removing office furniture is known as liquidation or decommissioning, and it’s intense, physical work. A single workstation — that’s the industry term for a cubicle — can consist of hundreds of individual parts that have to be taken apart.

TOM: So we’re doing a job downtown and it might be like, maybe a floor or two. Square footage is maybe 30, 50 thousand square feet, so you know, an average downtown building floor is anywhere from 25 to 50 or 70 thousand square feet. You can fit about a hundred workstations on an average floor.

WAILIN: The decommissioning is usually done at night. The furniture is loaded onto trucks and transported to a warehouse about 15 minutes from downtown Chicago. OFR might shuttle 15 to 20 truckloads of furniture to the warehouse on any given night. After 25 years in the business, Tom can estimate with uncanny accuracy how many truckloads are needed for a job. Nancy remembers when she and Tom did a walkthrough of a big downtown office.

NANCY: We must have walked 30 floors of the building. I mean, it was just like (sound) crazy. We got to the end and somebody said, “Well Tom, how many trailers do you think are gonna come out of this building?” And Tom said a hundred and five, and I think a hundred and six or a hundred and three came out of the building at the end and I’ll never forget it. His mind is just a trailer load.

WAILIN: The used office furniture business is heavy on logistics and manual labor, but it’s also built on human relationships because Tom and his staff need to know which Fortune 100 corporations are planning to move or redecorate. In the Midwest, OFR is tight with the big commercial real estate firms that manage office buildings. It also has contacts at new furniture dealers and local moving companies and installers, all of which can recommend OFR to their customers. The network that OFR has built is one you only get by being around for many years. And it all started with Nancy and a recipe box.

NANCY: Tom said we need to connect with every installation company in Michigan, Wisconsin, Illinois, Missouri. So I would go to to the library and get the Yellow Pages or the microfiche and get on those machines and write down phone numbers and then make phone calls, hey this is what we do, you know, do you ever have a need for this, do you have a garage full of stuff we can buy from old de-installations. I had four-by-six index cards and I had like a recipe box, and I alphabetized it and I would get on an airplane with my recipe box.

WAILIN: The result of all those phone calls and relationship building can be seen in OFR’s warehouse in Des Plaines, Illinois, a few miles from O’Hare International Airport. It’s just one of the company’s warehouses, and it’s packed to the brim.

TOM: This is 50,000 square feet of office furniture. There’s probably easy, a thousand workstations in here. There’s probably 1,500 chairs. There’s probably a couple thousand filing cabinets.

WAILIN: For OFR, the ideal liquidation is one that yields a lot of furniture with a high resale value, like Herman Miller chairs that are just five years old and have probably another 15 years of life left in them. On the other end of the spectrum is furniture that is outdated, like wood laminate surfaces that were designed to hold clunky desktop computers or big filing cabinets from the days when cubicle walls were higher and companies stored a lot of paper. There’s just not demand for that kind of furniture anymore. So the wood laminate goes to a landfill, along with stuff like fabric. Metal gets taken to a scrap yard for recycling, although it’s kind of a bad deal for the company right now.

TOM: The price of metal is really going down. The last time I looked, it was like 15 bucks a ton. A year ago at this time, it was 275 dollars a ton. So that’s a huge deal in our business because people always ask that question: “Am I gonna get any credit back for metal?” Well, at 15 bucks a ton, it costs us more money to put it on a trailer, bring it to the scrapper, than we’re getting back, so it’s a losing proposition for us, so we have to charge for that. When you were getting 275 a ton, you could actually give back to the customer credit for the metal.

WAILIN: OFR has faced other economic pressures, like Chinese imports that sell for the same price, new, as gently used furniture from Steelcase and Herman Miller. Then there was the most recent recession, when Fortune 100 companies kept decommissioning their offices but smaller businesses stopped buying furniture. It was incumbent on OFR to show customers they could create a nice space for a fraction of what it costs to buy new furniture, like $200 for a Steelcase chair versus a list price of $1,000. There’s another, more abstract sales pitch too, one that’s about convincing businesses that a more inviting office space leads to happier workers and increased productivity.

TOM: When you sell your house, the day of the open house, you always have a fire going in the fireplace, right? You’re trying to make people feel like this could be my space. Wouldn’t it be nice to be sitting there on Sunday with a nice fire? You’re just trying to give them that warm and fuzzy. Commercial furniture is the same feeling. You want people, when they get off the elevator, to feel like, I can spend the next eight to ten hours here.

WAILIN: OFR doesn’t just extol the virtues of used office furniture to potential customers. It furnishes its own corporate headquarters with chairs and workstations from liquidations. Last year, it decommissioned Google’s former office space in downtown Chicago. Google took all its chairs when it moved further west, but the company left behind some very nice Herman Miller workstations that convert from regular to standing desks.

TOM: Those are really hip. Everybody wants those; those are great.

WAILIN: Tom’s wife, Suzanne, who’s in charge of OFR’s finances, uses one of those sit-to-stand desks. Nancy Kidd has a special piece of furniture in her office too — the little green plastic chair that she used to sit on in Tom’s basement. The green chair originally belonged to Tom and Suzanne’s son, Jack, who was just a toddler when the business was founded and is now 26 and works in the Milwaukee warehouse.

TOM: You know, actually, in the last few years, he’s really probably the one that really makes it all work for us. He’s autistic, so for Suzanne and I to watch him grow and have a social environment at work, it brings tears to your eyes.

WAILIN: Tom has watched other long-time employees grow up and raise families of their own while working at OFR, and those are relationships he takes seriously. He believes in promoting from within and having everyone try each other’s jobs. Like if someone gets hired as an accountant, they might spend some time offloading furniture from trucks, just so employees understand every facet of the business.

TOM: Suzanne and I, we’re there all the time and there’s nothing that is above us. You have to maintain those relationships and be willing to do whatever you’re asking someone else to do. You should be willing to do and that is true when you’re 21 and that’s true when you’re 65. People have to understand that you’ve done that and you know what you’re talking about. They’ll respect that.

I would say 80 percent of my day is communicating to employees. The other 20 percent, I’m getting coffee. The interaction with your employees is like what makes me come to work every day. That’s the fun part. You’re watching them grow and you’re giving them the ability to grow.

WAILIN: As a used furniture guy, Tom never gets to see what the new spaces look like after a customer moves. But he always tells them, it’s okay. I’ll see the stuff in 10 years. And he knows better than most people that there’s still a lot of value in old furniture.

TOM: The reason why we’re successful and we started this business was the fact that I walked in that warehouse 25 years ago and I saw an opportunity to sell those chairs. I want everybody that works for me to feel the same way. They have to be able to recognize and see opportunity and then jump on it, and then live with it. Sometimes it works, sometimes it doesn’t. But if you don’t do it at all, you’re dead.

WAILIN: Nancy saw an opportunity, too, when she walked into the print shop and asked if they wanted to buy the two red chairs in her car. Those chairs are still at the print shop. Tom’s thinking of paying them a follow-up visit.

TOM: For our 25-year anniversary, we thought maybe we should go back and see if we can buy those chairs back and replace them with something a little bit nicer. I’d make it worth his while. And I’d bring him nicer chairs, too. I’d replace ’em. Wanna make sure that he’s happy.

WAILIN: The Distance is produced by Shaun Hildner and me, Wailin Wong. Our illustrations are done by Nate Otto. You can find us online at thedistance.com, where we have links to episode transcripts, and on Twitter at distancemag, that’s @distancemag. The Distance is a production of Basecamp, the leading app for keeping teams on the same page about whatever they’re working on. Your first Basecamp is completely free forever. Try the brand new Basecamp Three for yourself at basecamp.com/thedistance.