As South Africans we are becoming more aware of the importance of supporting local manufacturers and entrepreneurs. Ecommerce can be the perfect thing for a local start-up or small business to reach a far wider, national audience.
It seems as though everyone is jumping onto the ecommerce bandwagon. These days you can shop for anything you can imagine from the comfort of your couch. With all this potential for shopping, there is also a growing need for useful products. Do you have interesting, good quality products to sell?
If you are a local entrepreneur, there are 2 online ways of going about getting your goods into the hands of customers. You can either set up your own online store, or you can make use of existing platforms, such as Takealot, to sell your wares.
Setting up your very own online marketplace sounds cool, but it’s definitely easier said than done. It takes a lot of time, effort and resources to get a good website up and running. Plus you still have to worry about admin and marketing to get your store ranking on Google. If you are just starting out and only have one or two products, this might not be a worthwhile option.
The other idea is to make your sales via the Takealot online marketplace. They already have a customer base. That means plenty of shoppers are just scrolling away, waiting for your stuff to appear on their screens.
How does Selling on Takealot work?
First you complete the registration process on the Takealot Seller Portal. You list your products and their prices. You have the choice of storing your stock yourself and submitting specific quantities to Takealot as they receive orders. Or, you can send a batch of products through to be shelved at their warehouse distribution centre, then Takealot can fulfil orders as they come through (this option is a bit quicker, but we’ll get into that later).
Here is a brief rundown of the steps they outline on the Takealot Seller Portal website:
- Step 1: Apply.
- Step 2: Wait for approval.
- Step 3: Registration. This is the legal paperwork stuff that you need to sign on with them.
- Step 4: Onboarding. So, you choose how you want your stock to be taken ‘onboard’ and you get to learn about their processes.
- Step 5: Sales start happening once your products go live.
- Step 6: Growth. This step is long term. Once you start selling you need to keep up to date with reports to see how your business is doing and how you can improve.
So it sounds pretty straightforward right?
Here are some things you should know:
Takealot has a very informative page that explains how to sell with them so that you understand exactly how their system works. Next, it’s critical that you understand exactly how much it will cost to apply.
You will have to pay the following:
- Subscription fees.
- Success fees.
- Fulfilment fees.
- Storage fees.
How much does it cost exactly? Let’s say we are selling locally made iPhone covers. They are unique because they are made from sustainable bamboo instead of plastic, they are quite small and super light. They cost R180.00 each, including VAT. Remember this is just an example.
Let’s do a quick breakdown of the fees we’d pay for this example:
- Subscription fees: Subscription is R300 for every account, every month (this is excluding VAT so its actually R345.00)
- Success fees: Success fees are a percentage of your selling price. There is a one-page breakdown, but it’s better to download the 50-page document to work out exactly how much will be added. For us, the percentage on phone covers is a 14% flat rate. This means that Takealot will charge us R25.20 for every single Bamboo iPhone cover that is sold.
- Fulfilment fees: Next, we will be charged a small percentage for every single one of our items shipped from their warehouse. Cellular accessories fall under the standard category, in this case – R25.00 (this is excluding VAT – we would actually pay R28.75)
- Storage fees: Storage fees are charged if your product has been sitting on their shelves for more than 35 days. There is a way around this, if you choose to store your own goods and only send out stock in correct quantities once it’s been ordered. We choose this option and sell on a lead time, so we don’t pay any storage fees.
To complete our example, let’s pretend we sold 50 items. All the customers loved them, no one submitted returns and we got five-star reviews. So we earned R9000.00, which Takealot paid over! Yay! Not so fast… Our earnings would work out to about R5957.50 after Takealot has taken off their fees. Approximately R3042.50 would be absorbed into admin fees.
Maybe it sounds as though the Takealot Seller Portal is a bit expensive. Is it though? Remember, there are some very valid advantages of making use of this platform.
Advantages of Selling with the Takealot Seller Portal:
- Simple: It’s relatively simple to get started. Anyone can list themselves as a seller on their portal.
- Help for startup businesses: If you have a small start-up business, many people won’t have heard of you. Using a household name, like Takealot, will help your customers find your product.
- No shipping hassles: You don’t have to worry about arranging shipping. Once Takealot has your stock, they take care of distributing your products to the customers.
- Your products are more affordable: Selling through Takealot makes your product more affordable to customers. Since they are likely shopping for a few things, they don’t necessarily have to pay a delivery fee.
- Products can be reviewed: Reviews help market your product. Buyers on Takealot can do the world of good for your brand when they leave positive reviews. (Bear in mind though, your product has to be good quality and fulfil their expectations to generate five-star ratings.)
- Takealot is a great stepping stone: Once you have gained a following through Takealot it will be easier to start marketing your products elsewhere. You can view this as a stepping stone to opening up your own online store.
Is it worth it? That’s for you to decide. Ecommerce has great potential, just make sure you are well informed with a clear strategy and action plan before you start crafting your wares. Ecommerce has drastically changed the way shoppers shop, but ultimately as the seller, you still have to know exactly who you are selling to and whether or not they will actually buy your stuff.
Hi there! My name is Corbyn and I enjoy writing tech guides on a variety of topics. I always answer comments so if you have anything you want to ask or suggest, please go ahead and I will reply within 48 hours. If you are interested in getting your hardware or software reviewed, please use my contact form and we can talk business. Thanks for visiting my blog!