Kapas Baby: Lessons learnt buying an existing ecom business

In 2020, Cherise Kramer made a life changing decision. In the middle of South Africa’s hard lockdown, she decided to buy an online business – an established, award-winning brand called Kapas Baby.

At the time, Cherise was a successful medical rep for Cipla Pharmaceuticals, something she had been doing for ten years. She loved her job and the business she worked for, but as a new mom, spending so much time on the road no longer suited her lifestyle. And so, the entrepreneur in her kicked in.

“I went from being on maternity leave to back on the road, and then a few months later I was back home with my son because of the lockdown,” she explains. “It was immediately apparent that I didn’t want to leave him again. I’d reached a point where I wanted more flexibility in my life.”

Cherise’s sister-in-law, Nikki Tyack, told her about a business that she had heard was for sale – a brand Cherise knew and loved, Kapas Baby.

“Nikki had launched Esque Online a few years earlier. It meant I had someone with a lot of experience in this space that I could lean on and learn from. I also knew that I didn’t want to launch my own brand from scratch because I’d watched Nikki do it, and I’d seen how much time and dedication it takes to build a brand. I was looking for a side hustle that I could run while I was working for Cipla and that would hopefully grow enough down the line that I could resign, focus on it full time and have the flexibility I was looking for.”

Choosing an established brand was also the way Cherise and her husband de-risked the decision. “It’s always risky running your own business – and we were purchasing something new during a completely uncertain time. Kapas was established, it had an existing customer base, and I knew the brand because I was a customer. I loved the quality of the clothes and I, because I am the target market, I understand who we would be selling to.”

And so, Cherise and her husband took out a loan, Cherise cashed in her pension and she made an offer to purchase. Four weeks later, the business was hers.

“We were in the middle of a hard lock down, and so nothing was done face to face,” says Cherise. “I couldn’t even view the stock during our due diligence. Ultimately, the fact that I was a customer and knew the brand and it’s quality made a big difference.”

On the 12th of June 2020, Cherise became a part-time business owner, part-time sales rep. By November 2020, the business had grown to the point where she could no longer do both, and she resigned to focus full time on Kapas. By that stage, baby number two had arrived, and flexibility was more important than ever.

Leveraging an existing brand

Kapas Baby was launched by Kerryn Green in 2014. Kerryn designed all the clothes herself, manufactured them locally through a contract with a CMT (Cut, Make and Trim) business, and focused on building the online business as well as selling to retail clients who carried her range. 

By 2020, Kerryn was helping her husband build, and managing both brands was becoming difficult. “After 7 years, Kerryn was ready to focus on something new, which worked out perfectly for me,” explains Cherise.

“My dad was an entrepreneur, and even though I knew how tough it could be, it’s also incredibly rewarding. We also had my mom around when we were growing up. She came to every sports game, something I knew I would miss if I had a full-time job. Kapas is a way of ticking both boxes – being an entrepreneur and being around.”

When Cherise took over the brand, Kapas’ revenue stream was split 60% wholesale and 40% online sales, with the bulk of its wholesale client base in Cape Town. Lockdown affected wholesale sales, as did the collection.

“Wholesalers were very careful with their orders in 2020. They didn’t want to invest in stock that they weren’t sure they could move. We also discovered that our winter range is perfect for Kwa-Zulu Natal, where we’re based, but it’s too cool for Cape Town and Joburg’s much colder winters.”

Cherise had a choice. She could continue with the business’s existing business model, or shift her attention and resources to the online side of the business, which is what she chose to do.

“Today, 70% of the business is online, and that percentage continues to grow. We still have wholesale clients, and we value them, but we’re becoming more of an online retailer. The business isn’t what it was when I bought it. Covid-19 and lockdowns had a measurable impact, and of course, even though it was an established brand, I was not an established entrepreneur. There was a huge amount I needed to learn, and I’m still learning. We expected revenue to drop short-term. What’s exciting is watching everything I’ve learnt take shape. Realising that I couldn’t continue to be a good employee for Cipla and build this business was also a milestone for me, because it meant I had to take a leap of faith and put everything into this business, so watching our strategies work is deeply rewarding.”

Lessons learnt

Even though Kapas was an established brand, Cherise will be the first to tell you that she was thrown in the deep end – and it’s the best thing that could have happened to her.

“I’ve been here before,” she says. “I think it’s the fastest and best way to learn through. You rise to the occasion because you have to – there was no one doing admin for me, or my finances or even my marketing. I had to do everything myself. Some things I was good at, others I wasn’t, but I just kept learning.”

One of the biggest lessons was VAT. “I had no idea it would take so long to register for VAT. Six months later, I finally had my VAT number, and then the VAT period came to an end and I had no idea what to do next. It was a complete scramble. But you learn. Now I know that VAT is every two months, and I’ll never have that particular issue again.”

This is just one of the lessons that Cherise has learnt, and after almost a year, she has strong advice to offer other entrepreneurs entering the online retail space:

1. Do something you’re passionate about. When you’re starting out, there is a lot that won’t be fun, but you have to do it anyway. It’s therefore important to balance it out with elements you do love. For example, I’m artistic. I studied photography and then started working for Cipla straight out of university, so I never used it. Designing collections is an exiting outlet for me. It’s a side of the business that I really love.

2. Tap into your network. I was lucky to be able to ask Nikki for help. She showed me how to do my own social media marketing, schedule posts, and what I needed to understand about online retail. But she isn’t the only expert I’ve reached out to. When you don’t know something, ask someone in your network who might know the answer. Too many entrepreneurs try to do everything themselves because they don’t want to ask for help or admit that they don’t know something.

3. Outsource as soon as possible. When you launch, you’re doing everything yourself. I was sales, marketing, admin, product packer and shipper. If there was a hat in the business, I was wearing it. But marketing is very different to my background in sales, and once I was able to outsource our digital marketing to experts, we saw an immediate uptick in traffic to the website, which has supported our strategy to focus on online sales. As an entrepreneur, you don’t need to be the expert in everything, and you don’t necessarily need to hire people with the right skills either. There are a lot of freelancers, consultants and small agencies who can assist you, and their business is small businesses, which means their price point suits your budget.

4. Differentiate yourself. What makes you different from the next brand? One of the things that attracted me to Kapas is that it’s not an everyday brand. You can’t find clothes like ours at your local Woolworths. These are unique, beautiful ‘occasion’ outfits. It’s important to understand why someone would buy your product. Be honest, be brutal, and pivot what you’re doing if you don’t have a strong, clear answer to these questions.

5. Think about the end-to-end experience with your brand. Online shopping isn’t only about the product you’re selling. It’s about the user experience on your website, how reliable your brand is, how quickly orders arrive, and how easy it is to pay. Are you accessible? Can you customers reach you? Think about every touch point and perfect it. The less friction you can add to your customers’ lives, the better.

6. Believe in yourself. This is scary. We took a big leap to do it. I’m a proud person, and I knew that if I was going to make this work, I needed to be willing to learn, to ask for help, but most importantly, to continue believing in myself, even if I made mistakes. You’re never going to get everything right, and that’s okay, as long as you learn from every experience.

7. Start small but think big. Right now, I’m in contact with potential partners in Canada and London who will carry our brand on their online stores. My goal is to enter the European and Canadian markets with our beautifully, locally manufactured designs. It won’t happen overnight, but I know it’s possible. Never give up. Have a goal, create your strategy, and follow through on it.
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