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Kabbage Customers, Small Business Spotlight

Red Raven Boutique: a Small Retailer Making a Big Impression

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Small Business Stories: Helene Reda, Red Raven Boutique

 

Many people assume that it’s hard for small businesses in the retail sector to compete with bigger companies based on price. Especially now that so many people are shopping online, is it still possible for small businesses to stay profitable, or do people just want the cheapest prices that they can find?

One small business owner that is having success at selling online is Helene Reda, founder of the Red Raven Boutique, an online-only small retail business that sells cosmetics, clothes, and high-end shoes on Amazon and eBay. Helene is a Kabbage customer who has repeatedly relied upon Kabbage small business loans to help buy inventory and help fund her business’ growth.

We talked with Helene about how her business has grown, and how small retailers can compete in the world of online selling.

How did you decide to become a Kabbage customer, and what has the Kabbage small business loan money helped you do?

I found out about Kabbage just as a fluke coincidence while I was looking around for information on how to get financing. A lot of banks aren’t interested in loaning to small businesses, and there are peer-to-peer lending sites where small business owners can borrow, but a lot of the time that’s not quite the right fit. Kabbage was great because their people are really knowledgeable and friendly and helpful.

When I get loans from Kabbage, it’s primarily to buy additional inventory. This is important because as a small business, when you’re buying inventory from suppliers, it’s difficult to get good payment terms. With most suppliers, the terms are almost always “cash and carry.” So sometimes as a small retailer, you’ll find great opportunities to buy some new inventory, and Kabbage helps me get that money when I need it.

What inspired you to start your own business? 

Red Raven Boutique is an online-only retailer, and I run it out of my home. I sell cosmetics, clothes, and high-end shoes. I got started in this a number of years ago, after I had been living overseas for a number of years with a corporate job. When I moved back to the U.S. I suddenly had a house full of stuff and needed to clear it out. At the time, this was during the early days of eBay when that site had become a big sensation and a lot of people were using it to sell things online for the first time. I had read about people selling on eBay and making a fortune – so I decided to sell some items on eBay, and I did!

And even though I didn’t really know much about the retail world, I decided to see, if I could turn this into a business. So I gave it a shot. I did the research, started small with inventory, figured out which products were easy to ship – I was going to do it all myself, and be the sales person, production manager, inventory management, fulfillment, everything. I knew that if you’re going to start a business, it needed to be something that you knew, understood, and had a passion for. And I had a passion for shopping. I consider myself a recovering shop-a-holic! So I felt confident that I could translate this into a business.

I started buying small wholesale lots, and it took off from there. It took time and commitment; you learn a lot along the way. I found great suppliers who were helpful. They would give me great advice, and over the last number of years I’ve been able to grow my business. I’ve been selling online since 2002 and I incorporated my business in 2009.

Before I started my own business, I worked in the corporate world for a lot of years, and one thing with the corporate world is that if the economy goes bad, you might end up out of a job. But if you run a small business, if you work online, you have the ability to have multiple sources of income. Running your own business can actually be more “secure” than a job.

What does your business do differently from other companies in your field – what makes you unique?

I try to find products that you’re not going to find everywhere else. Customer service is really important – I have customers all over the world who have been coming back to me for years. I get requests for discontinued products and rare products, people say, “Can you help me find this? You’re my last hope!” I find that people appreciate extra effort and responsive service.

Where do you sell your products online?

I sell on Amazon, eBay, and my own site, which is being updated. I do a lot of business on Amazon. I used to do most of my business on eBay and now it’s switched mostly to Amazon. It’s a challenge on Amazon because you’re competing with Amazon itself along with all of the other Amazon marketplace sellers. But contrary to most people’s expectations, I have found that making sales online is not always about price. I’m rarely able to offer the lowest prices on items, but I have repeat customers who keep coming back to me because they get great customer service.

As a small business selling online, how do you compete with bigger, lower-cost retailers?   

I’ve found that lots of customers appreciate being able to talk to a “real” person at the business that they’re buying from. My customers tell me that they like my service, they like that the products they buy are exactly what they expected. I’ve had people tell me, “You’re by far not the cheapest, but I know it’s authentic, I know you keep your promises, and if something is wrong, you’ll fix it.”

Many people assume that online retail sales are always just about price, or assume that small businesses have to try to compete on price. That’s a mistake that a lot of small businesses make – lots of small business owners try to compete on price, and accept low margins during the early stages of trying to get their business off the ground. But my experience is that over time, when you build up your clientele, they’re looking for service and want to know what they’re getting – especially if it’s a gift for someone else. They want to have confidence that what they’re sending sight unseen is going to be what they’re expecting.

What has been the most surprising thing you’ve learned from running your own business?

A big one is: You can’t please everyone. As a perfectionist, that’s been a tough thing to accept. A fact of being a small business owner is that not everyone will be happy – you do the best you can, but there will always be someone who’s unhappy. Not every customer is the right customer for you, and that’s OK. You need to be able to let them go and focus your energy on the right customers who are happy to buy from you.

Another surprising insight is that running your own business is very rewarding. It’s a very fulfilling journey over the years of starting from scratch, building it up, having repeat customers keep coming back, and actually making money.

Red Raven Boutique is not my only business – I also sell insurance. And one time, I went to see a client for an insurance meeting, and at the time I was driving a sports car. The client said, “You make enough selling insurance to afford that car?” And I said, “No, actually this car came from my little online business selling cosmetics.” It was so rewarding to get my business to a point that I could afford to pay for this nice car. But beyond that, it’s not always the dollars and cents, but it’s the satisfaction along the way.

What’s the biggest challenge of running your own business?

Inventory. Small businesses get inventory from a variety of places, but all suppliers expect you to buy a minimum amount. I can’t afford to buy 300 of one item. Also in terms of funding – in smaller amounts, suppliers expect cash or credit card; no one’s giving you 30 or 60-day payment terms.

Finding the right inventory in the first place is a challenge; some manufacturers don’t want to sell to small online stores, and they often want to keep their products restricted to the bigger retailers. So just finding suppliers where you can get a reasonable price and still be able to make money on it is one of the biggest challenges.

What are some overall trends that you’re seeing right now in your market, or for small business owners in general?

I’m seeing more and more people buying online instead of going to stores. It’s more for convenience than anything else; shopping online makes it easy to do price comparisons. But people going online aren’t as concerned about where the items came from – Macy’s or Saks or Amazon – they just want a specific product at a specific price point.

It’s more competitive than it used to be, but I’m finding that people buying from Amazon tend to view it as more, for lack of a better word, “established, legitimate” businesses. Buyers on eBay tend to be more likely to haggle, so people tend to think of eBay as more of a “garage sale.”

I think this is a holdover from the early days of eBay, when it used to be mostly individuals selling there. There weren’t a lot of stores or big retailers selling on eBay back then. Amazon was the opposite – when Amazon started out, they required their sellers to be approved to sell in certain categories. I don’t think that the perception has quite caught up when it comes to eBay; people don’t seem to realize that these are real businesses selling online.

Do you feel like there is increasing interest in buying from specialty stores and boutiques? What about online shopping – how are you able to compete on Amazon against bigger retailers?     

The Internet is great for niches. You can find people all over the world who are looking to buy exactly what you sell. If you’re selling things that are a bit more unusual, you can definitely do well. I have clients all over the world who I never would have been in touch with if I only had a brick-and-mortar store. A lot of small business owners are afraid of international shipping. It’s a few more forms to fill out, but it’s not too complicated. And you can make good money in the international market, especially depending on how low the dollar is against the international currencies.

What other advice would you offer to other small business owners?

Be up for the challenge, be committed for the long haul. You might not have an overnight success; be positive and stay focused, and don’t be afraid to ask for advice if you run into business problems. Sometimes even your competitors will offer advice – small businesses tend to help each other out.

You can follow Helene Reda and the Red Raven Boutique on Facebook at @RedRavenBoutiqueNY.

 

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Kabbage Team

Kabbage is here not only to provide access to the small business funding you need, but to also help you grow your business through free marketing tips, webinars, tools and more. Is there something you'd like us to cover or want to get your small business featured on our blog? Send us a note at content@kabbage.com.