Having twins provided the most rigorous product testing for Meagan and Brett Redelman the co-founders of Redsbaby.
The pair didn’t have any children when they decided to start up the online pram business in 2013.
“Brett and I always wanted to start our own business, it was something we had toyed with for quite some time,” Meagan says. “We had looked at quite a few business opportunities. We were sitting at a cafe with parents and they were saying they didn’t like their pram, it wasn’t functional and it wasn’t particularly stylish. That was when we had our light bulb moment and thought ‘let’s look into this’.”
A uniquely Australian pram
The Redelmans identified a gap for a uniquely Australian pram through “thorough research” of the market.
Redsbaby prams feature UPF 50+ sunshades, maximised air flow for hot weather, a compact fold with lots of storage space and a lightweight frame designed to be taken in and out of the car with ease.
“We didn’t have children but that played to our advantage as rather than relying on our own opinions it meant we were forced to do even more research into our target market needs,” Meagan says. “Then we went on to have twins, believe it or not, and that really added another element for us. The way we looked at the product did change a little as we were able to add our own personal experience into it.”
The ultimate product testing occurred when the Redelmans had twins.
The Redelmans started the business with $40,000 in savings and decided to sell solely online bypassing traditional retail outlets.
They had no prior experience in the business of prams or manufacturing but say this didn’t disadvantage them.
“When you launch a company you don’t have all the resources to hand, especially when you go into manufacturing with China,” Brett says. “Particularly with the growth we have had, the manufacturer you have access to on day one is not the one you have as your business has grown.”
The early days were tough with customers unsure about purchasing from an unknown brand before trialling the products. To overcome this the Redelmans would drive to customers’ houses around Sydney and give them one-on-one product demonstrations.
We got the right product at the right price at the right place at the right time.
– Meagan Redelman
They drove the 10-plus hours to Melbourne and Brisbane to show their prams to customers at “demo days” and personally packed and fulfilled all the orders from a family warehouse in Rosebery.
“We broke even after three months and have been cash flow positive from then,” Brett says. “At no point have we been forced to take on an investor or use debt. That’s been quite unique.”
Non traditional funding
Redsbaby now turns over $5 million a year and employs 35 staff. It has fulfilled over 10,000 orders and claims 14.5 per cent of total online pram sales.
“We got the right product at the right price at the right place at the right time,” says Meagan.
Redsbaby relies on non traditional funding by using credit cards to procure stock from China via global fin tech company Octet.
“Even though we are cash flow positive it really allows us to free up cash,” Brett says. “The beauty is we can pay a supplier today and then for 51 days we have an interest free loan. We are the fastest paying customer that they have. We are a small customer compared to others but they love to work with us. Any small business has to look what they can bring to the table when dealing with large manufacturers.”
The Redelmans are now looking to grow Redsbaby further.
“We have gone into nursery furniture and have started to expand our product portfolio,” Meagan says.
Jana Matthews, director of the Centre for Business Growth at UniSA Business School, says the challenge for Redsbaby is one faced by many online retailers and consumer brands, increasing revenue and margins.
“Since Redsbaby is not likely to sell more prams to their current customers, they’ve developed a new product,” she says. “Selling new products to current customers will help them get to the next level, but then they’ll need to develop a strategy for entering new markets, and new countries. We need more Australian companies with great products to figure out how to go global.”
That’s a challenge the Redelmans are up for.
“The next thing is focusing on the international market,” Megan says. “The Australian market is our home market but we are going to be looking at the back end into export in a more limited capacity in Western Europe and the United Kingdom.”
Article originally published by Cara Waters at The Age Small Business on June 5 2017: http://www.theage.com.au/small-business/entrepreneur/the-unconventional-pram-company-redsbaby-20170601-gwht1s.html
Find out more about Dr Jana Matthews’ work and programs at Centre for Business Growth here.