In this series, we ask some of Canada’s Top Growing companies to share advice on finding new and innovative routes to success in an unpredictable business environment.
If you don’t want to move it, online auction firm MaxSold can probably sell it.
That premise has turned out to be a winning formula for the former live-auction business, based in Kingston, Ont., that ventured into e-commerce about decade ago.
“The idea was to create an intersection between that high-touch service for downsizing and estate sales that people still need, and a high-tech service provided by eBay, Craigslist, Kijiji and other online marketplaces,” says MaxSold’s president and chief executive officer Sushee Perumal.
MaxSold has indeed found a sweet spot for growth, first rapidly expanding across Ontario and then into the U.S.
“We knew that if there were to be a competitor, it would be out of the U.S., so we wanted to tackle it before the rest of Canada,” he says, noting it also now has operations in B.C. and Calgary.
Its strategy worked. MaxSold is now dominant in the U.S. among online auctioneers for estate and moving sales, completing thousands of sales annually in nearly 1,400 communities – including 20 states – while employing more than 500 people.
Sales at the end of 2020 – a year heavily impacted by the pandemic – were $20-million, the company’s best to date, and this year is expected to be even better with sales forecast to almost double, says Mr. Perumal.
Earning a spot on The Globe and Mail’s Top Growing Companies for 2020 at number 243, MaxSold’s success has been a wild, arduous and ultimately profitable journey for Mr. Perumal, 43, a father of a young family.
He has spent much of the last decade criss-crossing the continent in a 1978 single-engine Cessna 182, meeting with potential partners, real estate agents and move management firms, which has been essential to the company’s growth.
“This is a very trust-based business, so we looked at other businesses that could benefit from ours and how we could leverage their relationships in the communities they serve,” he says.
Mr. Perumal’s commercial pilot license, earned years ago as a hobby, has been particularly useful, allowing him to take calls from prospective partners in Boston at 9 a.m. and meet them for a lunch meeting at noon.
“Much of the last decade has been this mission impossible with no money,” he explains.
If it wasn’t for access to the borrowed aircraft, which Mr. Perumal describes as an old Volkswagen van with wings – “complete with an ashtray” – MaxSold may have never overcome the “chicken-and-egg” problem that stymies growth for most online marketplaces.
“You need a selling audience and a buying audience, but the trouble is sellers don’t want to use you unless you have a buying audience, and vice-versa.”
Mr. Perumal tried every idea he could think of to grow MaxSold’s user base, hiring public relations firms, marketing companies and consultants.
Yet connecting with realtors and others involved in helping individuals move proved to be the fertilizer for revenues to blossom.
“They had this bleeding neck problem where they were spending so much time, money and effort clearing out clients’ stuff,” he explains.
Other businesses offer similar services, but MaxSold became dominant in several markets because it is the only one that catalogues, measures, photographs, describes and sells absolutely everything.
“Others cherry pick, and most other items end up the landfill,” he says. “We sell everything from the cleaning supplies under the sink to the car in the driveway.”
The idea isn’t Mr. Perumal’s, but Barry Gordon’s, the son of the original owner of the auction business started in 1956. Mr. Gordon recognized the future was online but had no idea of how to transform the business.
He turned to nearby Queen’s University for guidance, which eventually led him to former MBA grad Mr. Perumal, working as a consultant.
“Let’s just say I have an entrepreneurial streak in me,” says Mr. Perumal, now MaxSold’s largest individual shareholder, about taking the job for free at first. As MaxSold grew in Ontario, he eyed the U.S. and asked mentors for advice.”
Most said, ‘Why would you want to take the risk?’ " adding that larger companies had tried and failed.
“I heard their advice, but I wanted to do it anyway … and for the first couple of years, it was like pushing a rock up a hill.”
Hard work paid off as revenues grew quickly in Phoenix, Atlanta, Los Angeles and elsewhere. Then the pandemic struck; operations froze for weeks while Mr. Perumal rethought the business model, including launching an app for customers to list their own items. MaxSold also offered curbside pickup and developed protocols so its workers could safely enter customer homes.
“In a way COVID accelerated business,” he says about increased e-commerce adoption and the concurrent real estate boom. “It was being in the right place at the right time and being prepared.”
Recent success helped attract investment from a venture capital firm, funding to fuel further U.S. expansion and across Canada too.
Mr. Perumal has even purchased his own aircraft: a 1977 twin-engine Cessna. A little faster than the single-engine plane he borrowed, he hopes to meet clients even quicker when travel restrictions ease.
As for advice to entrepreneurs about the U.S., Mr. Perumal says be persistent and not afraid to try anything, because something is bound to work.
“There is no silver bullet – just a lot of lead bullets.”
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