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How Shelf Life Went From Longmarket Street To The World With PayPal

Learn how Nick Herbet of Shelf Life grew his ecommerce business with the help of PayPal.

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Vital Stats:

  • Company name: Shelf Life
  • Spokesperson: Nick Herbert, owner
  • HQ: Cape Town, South Africa
  • Industry:Retail & eCommerce
  • Website: shelflife.co.za

When you can corner a premium global market from the southern tip of Africa, you don’t need much more evidence about the Internet’s power to make the world a smaller place.

This is exactly what Shelf Life has done. The streetwear and sneaker store started life as a bricks-and-mortar shop – based in Cape Town’s Longmarket Street – in 2006. It added an eCommerce channel in 2009, introducing PayPal, the safer, easier way to pay and get paid online, during a site revamp in 2012. Today, it is one of a handful of suppliers around the world of limited edition sneakers from brands such as Nike, Adidas, Puma, New Balance and Asics.

When as few as 300 pairs of exclusive collectors’ item brands might be released globally, Shelf Life has real life customers queuing overnight outside its store to get their hands on the sneakers. Online, customers do the same, setting up alerts and automated bots to tell them when gear is launched.

However, savvy customers want to be sure they are buying the real deal, especially online. They often wait for months for new releases and, with limited edition sneakers retailing for up to R4 000 plus the bragging rights of owning a pair, trust and security are essential when selling these products online.

Related: How Fashion Start-Up ToVch Built A Brand Presence With Only A Little Budget

Peace of Mind

Shelf-Life-ecommerce-store-logo

This is where PayPal comes in. When the Shelf Life online store was revamped in 2012, PayPal was a key building block in not only allowing company to sell to a global audience, but also, thanks to PayPal’s Buyer Protection, giving customers the peace of mind that if anything did go wrong, their eligible purchases are protected.

Of course, Nick Herbert, owner of Shelf Life, and his team pride themselves on only supplying 100% authentic sneakers. They undertake to personally inspect each item before it is shipped to ensure quality and customer satisfaction. In addition, however, PayPal’s Buyer Protection gives customers around the world extra layer of protection[1] when purchasing such in-demand, premier products from a country they might never have visited.

“We stake our reputation on the authenticity of our sneakers,” said Herbert. “PayPal’s Buyer Protection is a way to prove that to our customers: if they don’t get what they ordered, PayPal can help them to get their money back. This gives them the confidence to buy from us.”

PayPal is also easier to use, and saves time as there is no need to retype the financial information that is already stored in the account, which is important when customers are working against the clock to ensure they get the right product in the right size.

“PayPal is simply the easiest way to make a payment online,” says Herbert. “Many of our customers only use PayPal for international payments, so we would lose foreign customers if we didn’t offer it.”

“Repeat business using PayPal also shows it works and that our customers are happy.”

Business Support

Shelf-Life-shoes-store

PayPal also offers Shelf Life, a rapidly growing small business, several advantages. For a start, payments with PayPal can be made and accepted in most major currencies, making it very easier to deal with international customers. Also, the withdraw service is available for all merchants, even those who don’t bank with FNB.

Thanks to the bank-managed withdraw service offered by FNB, South African individuals and sellers can withdraw their funds from their verified PayPal account to any qualifying South African bank account, while shoppers can top up funds to their PayPal account if they are FNB customers.

According to Herbert, using PayPal also helps to protect the company from the credit card fraud it had previously experienced thanks to PayPal’s sophisticated fraud prevention tools. Finally, PayPal and Shelf Life’s accounting software programmes are compatible, further saving the company time and money on administration.

Related: Boutique Branding Consultancy Morake Design House

Shelf Life’s Nick Herbert loves PayPal because:

  1. It’s more secure
  2. It’s easier to use
  3. Customers expect it
  4. It makes outgoing foreign payments easier
  5. It helps build trust in the authenticity of Shelf Life’s products
  6. It can help boost online sales

What’s Next for Shelf Life and PayPal?

Shelf-Life-ecommerce-store

Local business is thriving, thanks to the sneaker culture gaining a foothold in South Africa over the past few years. Online sales still remain strong – this channel is both more profitable and allows Shelf Life to tap into a truly global market. Locally, Herbert is looking at a second bricks-and-mortar store, and is sourcing additional brands to meet demand both here and around the world, online.

Learn More

To learn more about how PayPal can help your business sell more – and connect with your customers wherever they shop – go to paypal.com/za

[1] Conditions apply. Please check PayPal User Agreement.

At PayPal (Nasdaq:PYPL), we put people at the center of everything we do. Founded in 1998, we continue to be at the forefront of the digital payments revolution. PayPal gives people better ways to manage and move their money, offering them choice and flexibility in how they are able to send money, pay or get paid. We operate an open, secure and technology agnostic payments platform that businesses use to securely transact with their customers online, in stores and increasingly on mobile devices. In 2015, 28% of the 4.9 billion payments we processed were made on a mobile device. With our 184 million active customer accounts, PayPal is a truly global payments platform that is available to people in more than 200 markets, allowing customers to get paid in more than 100 currencies, withdraw funds to their bank accounts in 57 currencies and hold balances in their PayPal accounts in 26 currencies. For more information on PayPal, visit www.paypal.com/about. For PYPL financial information, visit investor.paypal-corp.com.

Company Posts

Balancing Business And Investment Risks

It is vital that entrepreneurs develop additional revenue streams and create wealth outside of their business to ensure their financial security. Sheldon Friedericksen unpacks the benefits of including Fedgroup’s Secured Investment offering in a diversified portfolio.

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Entrepreneurs tend to have a natural affinity for risk-taking. While carefully calculated, they bet big on their businesses, often going all-in when investing financial resources to start and grow their companies.

“Given this commitment, many entrepreneurs view their business as their ultimate retirement plan. This can be a mistake, because it places all their proverbial financial eggs in one basket,” explains Sheldon Friedericksen, Chief Financial Officer at Fedgroup.

As an entrepreneur, it’s important that you consider how a diversified investment portfolio that spreads risk can offer greater financial security, while still delivering robust returns.

“Paradoxically, while most successful entrepreneurs excel at diversification – they often pursue multiple opportunities, or pivot their business to exploit new gaps in the market – their investment portfolios seldom follow suit,” continues Friedericksen.

Exposed to volatility

This inherent appetite for risk means entrepreneurs often also employ a different approach to investing. “Allocations tend to reflect this risk profile, with portfolios heavily skewed towards high risk, high return assets such as equities.”

Related: More Than Sun In Your Eyes: Fedgroup’s Impact Farming Solar Offering

However, entrepreneurs need to carefully consider their asset allocations, taking into account their business in relation to their other investments. “As the sole or majority shareholder in a business, an entrepreneur already has massive exposure to equity risk, whether the company is listed or not,” says Friedericksen.

It’s also important to insulate investment portfolios from the potential impact of stock market corrections. The recent slump in the value of shares in companies that were previously considered mainstays in the portfolios of astute investors and leading fund managers has highlighted the variability in risk inherent in a concentrated equity investment approach.

“Since the start of 2018 a range of blue-chip JSE-listed companies have shed significant value as equities shrugged off positive market sentiment and reacted to weak economic fundamentals and, in certain instances, corporate governance irregularities,” says Friedericksen.

In the face of these developments, he believes that entrepreneurs should ask if they can solely rely on stock investments, especially when the bottom drops out of heavily-weighted shares like Steinhoff?

“While investing in equities has long been considered one of the best ways to achieve above-average returns, in the context of an entrepreneur’s risk profile there is always a need to include lower-risk, secure investments in your portfolio to ensure a degree of security and certainty.”

Your capital secured

A suitable option is Fedgroup’s Secured Investment participation (part) bond offering, which combines fixed, high returns with capital security. “We created our Secured Investment product to help investors earn a higher level of income than that offered by money market funds, while protecting their capital value.”

Part bonds are a low-risk, high-yield fixed deposit investment fund backed by first mortgage bonds on a physical properties.

This type of secured investment offers predictability with a fixed, guaranteed interest rate for the full term of the investment, allowing for accurate calculations and projections on growth.

“It is also a type of collective investment, which is governed by the same strict regulations as unit trusts and is regulated by the Financial Sector Conduct Authority (formerly the FSB). This means invested capital is secure and protected by law.”

Income or growth

Entrepreneurs can choose to invest for income, as interest earned at the nominal rate of 8.75% p.a. can be paid out monthly.

“Alternatively, investors can choose to invest for growth. By reinvesting the income, investors benefit from the power of compound interest, earning an effective rate of 10.9% p.a. over the five-year investment period,” continues Friedericksen. Investors also have the flexibility to switch from the growth option to the income option without attracting penalties.

What’s more, Fedgroup charges no fees on the investment amount, or on the interest earned, so returns aren’t eroded. “Our income is earned from the properties we finance and the interest income generated.”

Since launching its Secured Investment offering in 1990, Fedgroup has experienced significant inflows from both institutional and private investors, particularly for lump-sum cash investments. “We are currently managing over R2 billion within our Secured Investment portfolio,” confirms Friedericksen.

Related: What Should I Know Before I Invest My Hard Earned Money?

“Investing in assets that are counter cyclical to the industry within which entrepreneurs operate, and including more conservative, stable investments like our Secured Investment in a portfolio, is a smart diversification strategy for any business owner. This investment approach mitigates risk and offers greater financial security, which ultimately enables entrepreneurs to pursue a more aggressive business strategy,” he says.

The benefits of investing in a Secured Investment:

  • A high-yield, no cost fixed deposit investment
  • A low-risk investment that is secured by first mortgage bonds on physical properties and is highly regulated
  • Every property investment opportunity is objectively analysed and evaluated against a strict set of criteria, with a maximum of 75% of the asset value loaned for the mortgage
  • The fund has close on double the ratio of security (value of the properties) to outstanding loans (value of mortgage bonds), ensuring that investors are well protected
  • Offers predictability with a fixed, guaranteed interest rate for the full term of the investment
  • Offers flexibility to invest for income or growth to meet specific investor requirements

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Company Posts

Public Private Partnerships Can Work For Entrepreneurs

Property Point will develop 16 small business in the property sector of which two thirds are youth and women owned.

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In a landmark partnership for collective economic growth in South Africa, the Department of Small Business Development (DSBD) joined forces with Property Point, a Growthpoint Properties initiative, to develop more small businesses for South Africa’s property sector. DSBD has allocated a R5 million grant to Property Point for a one-year small business development programme as part of its Enterprise Incubation Programme (EIP). This breakthrough initiative is the first public-private partnership of its kind in the property sector. It will develop 16 small businesses in the property sector of which two thirds are youth and woman-owned.

For  this  unique  16-business  intake,  Property  Point’s  programme  is powerfully market driven. It will raise the profile of the entrepreneurs and strengthen their competitiveness, with a deep focus on market integration. The programme aims to create market linkages for these small businesses that will see them included in procurement opportunities in the broader property sector, as well as Growthpoint. It is expected to set new benchmarks for small business integration into private sector supply chains.

Related: 4 Black-Owned Businesses Participating in This Enterprise Development Programme That Are Growing – Fast

Estienne de Klerk, CEO of Growthpoint South Africa, says: “We believe in the principles of social and economic transformation and empowerment on all levels, and we are committed to achieving this. As a hands-on property owner, we own and manage our buildings – we recognise our unique position to develop small businesses to increase their access to market opportunities. We are proud to contribute to this pioneering public-private partnership designed to deliver on South Africa’s transformation, small business, economic growth and job creation objectives.”

Shawn Theunissen, head of Property Point and head of Corporate Social Responsibility for Growthpoint Properties, says:

“Property Point’s  objective  has  always  been  to  contribute  to  South  Africa’s economic growth. Using a best practice model, we have delivered positive results in our new partnership with government. This will escalate our impact on transforming the economy at a crucial time when South Africa is dealing with high unemployment and low economic growth.”

The beneficiaries of the Property Point and DSBD partnership have advice on how other entrepreneurs can make the most out of similar programmes:

Advice from Zoleka Ngema of Senzee Trading

zoleka

Contact www.senzee.co.za.

  • Be honest this helps you define your position and helps you view the real issues in your business.
  • Do every task diligently every business is different and what works for one might not work for you, so working diligently personifies the tasks and therefore adds value to your business.
  • Lessons are continuous remember & do the tasks done as these will create a cycle of growth even after the course is over.

Related: Want To Start A Property Business That Buys Property And Rents It Out?

Advice from Sibongile Shikwambana of Sandwind Coatings

sibongile-shikwambana

Contact www.sandwind.co.za.

  • Be fully present, participate and take advantage of every single opportunity
  • Drive your own business agenda; recognise that you and no one else can make your business successful
  • Build and maintain meaningful relationships.

Advice from Teko Motlhabi of Techmo Air

teko-motlhabi

Contact www.techmoair.com

  • Try to be present and involved with all the activities and opportunities handed to you
  • Ask for help from the Programme Managers and the rest of the team when you need it
  • Create relationships with your fellow entrepreneurs and collaborate.

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Business Landscape

How SMPs Can Support Businesses Looking To Internationalise

Key findings from a new global research report from ACCA suggest Small and Medium Sized Accounting Practices (SMPs) recognise many of the key challenges and opportunities that internationalising SMEs face in today’s global economy. This provides them with an excellent platform towards providing additional value-added support to clients.

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Much has been written in recent years about how SMPs are experiencing a growing number of commercial challenges that are disrupting the client services they have traditionally relied upon for revenue.

Equally, many have argued that more SMPs need to consider whether diversification into new advisory services could be the key towards the sector’s future success. However, such change can be difficult when talent flows in the sector are uncertain and competition is fierce.

Whilst not appropriate for everyone, ACCA was therefore interested to explore whether international trade is one area where SMPs’ unique experience and expertise might lead to the development of new service provision.

Our findings suggest that many SMPs are equipped with an excellent platform towards providing additional value-added support to clients. However, despite SMPs stating that most of their clients had been involved in some form of international activity over the last three years, their current provision of relevant support remains highly focused around a small number of limited areas.

The new report, Growing Globally – How SMPs can support international ambitions, also revealed the following about internationalisation and the relevant advice landscape for SMEs. 

Although the research was global, specific findings from five key markets have also been extracted and presented. These markets are Ireland, Malaysia, Nigeria, Singapore and the UK. They were selected on the basis of their representation of markets in various stages of economic development, and their global and regional importance to international trade.

SME internationalisation today

  • Just under half (45%) of SMEs said the main benefit of internationalisation was access to new customers in foreign markets. Increased profitability (35%), faster business growth (33%) and access to new business networks (30%) followed.
  • Both SMEs and SMPs considered ease of doing business and high growth potential as the most important factors when choosing an export destination. Geography was seen as less important, which may be a result of new technologies reducing its significance as a perceived barrier.
  • Both SMEs and SMPs recognised foreign regulations as the most significant barrier to internationalisation. For SMEs, the second most important was competition (27%) though for SMPs it was foreign customs duties.
  • In terms of the future, SMEs’ international ambitions are focused on building the capacity of their business (45%), building networks in foreign markets (45%) and introducing or developing more products and services to market (44%).

Related: Technology In Accounting – Race For Relevance

The advice landscape

  • A wide breadth of professional advice and support is used by internationalising SMEs, who tend to reach out to different sources as they move along their internationalisation journeys. Government or relevant public agencies (39%) are the most widely used source of professional advice, closely followed by lawyers (35%) and then banks (33%).
  • Accountants are most likely to be used by SMEs when looking for support on international tax, regulatory compliance, foreign exchange and accessing external finance.
  • Only 9% of SMPs said they had no clients who had been involved in any international trade activities over the last 3 years. Importing and exporting activities were the most common, as was participating in broader international supply chain networks.
  • SMPs mainly rely on internal and informal resources when advising clients about internationalisation. However, this gradually shifts towards a reliance on more external and formalised resources as practices grow in employee size.
  • Just under half (47%) were not members of any networking organisation, potentially missing out on valuable resources that could enable the development of more effective forms of international support.

Using these findings, ACCA conducted a series of interviews and roundtables with SMPs and SMEs globally. The subsequent insights were used to develop recommendations on how practices can look to develop their international advisory provision.

  • Specialisation is key – For those developing their international advisory provision, it is vital to first identify an area of the market where you believe your practice has the opportunity to effectively develop its expertise, resources and intelligence to best suit the needs of your clients. SMEs’ demands for international advice vary according to sector and size of business. Building a market focus is more likely to make any future expansion of international support more achievable and successful.
  • Adopt a strategic mindset – Identifying where you could best add value in terms of international support requires SMPs to think strategically and embark on initial planning and research. The best place to start is with existing clients rather than prospective ones, as they provide a readily accessible (and more approachable) evidence base to explore where demand is likely to be greatest. Making efforts to understand your clients’ internationalisation needs can then help you shape your wider international advisory offering.
  • Expand your international network – Networks are integral for the development of new professional advisory services but particularly with regards to internationalisation. This is because global value chains often necessitate close and efficient coordination of activities between businesses. SMPs should therefore aspire to become the central referral point for clients looking to find the most appropriate source of professional advice.
  • Invest in professional development – Practices must have highly skilled staff with the appropriate intellectual knowledge for clients to recognise the value in the services offered. Creating a structured programme of learning activities for staff around international trade could be useful for SMPs looking to upscale their international advisory provision. This could involve introducing formal learning activities across more technical areas of international trade (such as tax, compliance and foreign exchange) as well as working with other firms to develop knowledge networks where staff can learn, collaborate and access good practice.

Related: Investing In Value Creation Tools Can Help Your Business Grow

As SMEs continue to seek new ways of engaging in international trade, partly brought about by developments in technology, practices are being presented with opportunities to develop and widen their international advisory provision.

For some SMPs providing additional support to clients involved in international markets will not be feasible or practical. Nonetheless it is important for all practices to continue recognising the changing realities of how SMEs are operating globally.

The key challenge in taking advantage of such opportunities is centred on the risks that inevitably come with the business model optimisation required to provide new and relevant client services.

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