There are a few fulfillment platforms in South Africa such as Parcelninja and even the flex space landlord Inospace has an order fulfillment service for e-commerce. But neither has a marketplace leaving you to drive traffic to your site on your own. Enter the biggest marketplace in South Africa: Takealot. The main advantage of Takealot is that you get an instant market but the price is very high (too high for some).
Takealot’s “Seller Solution” is the closest we have to a “FBA” or “Fulfilled by Amazon” in South Africa (the Eye of Sauron is almost upon us). But it has dangerous pitfalls: high fulfillment fees, success fees, storage fees making a lot of products unfeasible to sell on the platform or at least some with crazy pricing. Why? because Takealot takes a minimum fulfillment fee. If a pack of 100 ear buds cost R10 from the supplier and you try to resell it. Takealot’s minimum fulfillment fee on Health FMCG’s is R30!!! meaning it has to sell for minimum R40 but even then you losing money because you still need to pay a success fee of 10.0% – 12.0%!!!. Wait there is more: stock standing for more than 35 days at the Takealot warehouse? You start paying a monthly fee. But wait there is even more…Takealot has a very generous return policy and people can just return your products in most cases without issue.
So what do you sell?
Well you can certainly try to sell a lot, and I mean a lot of cheaper items with smaller margins and hope they all add up, this is usually done with commonly used everyday items aimed at people who use Takealot for general shopping and don’t mind their crazy premiums on small items relative to retailers such as Checkers or PnP. But most people are looking for smaller items with larger volumes.
A myriad on “influences” has popped up in recent years telling people to buy crap from ChinaTown and resell it on the platform. But be very wary of these people most of the are just making videos to sell courses no different than the forex guys, they overstate this sales channel with fiction to get more followers and upsell their courses or to get adviews. Takealot’s business model is evolving to push most of the risk to third party sellers (the house always win) with the step from marketplace to platform (like Amazon). I know of a place that sells Takealot returns and see trucks and trucks and trucks of returns dropped off. Takealot is absorbing massive losses by sucking on Naspers / Tencent’s teat since the days of Kalahari.net eventually the main source of revenue will become third party sellers.
So should you even sell on Takealot? Well it depends, in SA there are no good choices. You are either going to pay Google Ad(word)s a lot of money with no guarantee of sales to drive traffic to your website, pay commission on Bidorbuy/Bobshop with much little to no sales. So all those people saying go into China Town and buy a R20 keyboard and sell it for R200, none of them mentions that is may happen now and then and you maybe walk away with a R50 profit or so a week. You need to fully apply your mind and factor in all fees.
