You may have heard that selling on the Takealot Marketplace is one of the best ways to access the South African e-commerce market. Whether you are wanting to generate some passive income or start an e-commerce empire this is the guide for you. Selling on the Takealot Marketplace may sound confusing but with this guide we’ll help you understand all the requirements for getting an account set up on the Takealot Seller Portal, familiarise you with the fees, and make you aware of potential pitfalls that come with selling on the Takealot Marketplace.
By following this guide you’ll be able to begin your Takealot Marketplace journey with confidence, starting the path to building a profitable internet business.
Why sell on the Takealot Marketplace?
Takealot is the largest e-commerce website in South Africa and every month 10 million people visit Takealot.com to see what products are on offer. In 2019 Kim Reid the CEO of Takealot announced that Takealot had generated R5 billion in revenue for the previous year and that within the next 5 years they were on target to generate R20 billion per year.
What makes Takealot unique among retailers in South Africa is that they provide a marketplace. Where traditional retailers will only buy from a select few suppliers, Takealot allows anyone who is approved to list products on their e-commerce store, where they can be purchased by the millions of people who visit Takealot each month.
To put this opportunity into perspective, in 2019 36% of Takealot’s R5 billion was generated by Sellers on its marketplace. In 5 years when Takealot exceeds R20 billion in annual revenue, it is estimated that 60% of sales will be generated from sales on the Takealot Marketplace, meaning that there is R3 billion opportunity for Marketplace Sellers.
Takealot Seller Portal Registration
Before you can sell your products on the Takealot Marketplace you’ll need to apply to become a Takealot Marketplace Seller. You can apply to become a Takelaot Marketplace Seller at this URL https://www.takealot.com/sell. Takealot will ask you to fill in information about your business and the range of products you wish to sell on the Marketplace. After you have submitted the application form you can expect Takealot to get back to you within 10 working days.
Takealot no longer requires that sellers have a registered business and an existing range of products in order to be approved. As of February 2020, you can apply to sell as an individual and all you’ll need to be approved is your South African ID number and a bank account.
Getting Started Selling on Takealot
Once your Seller Account has been approved by Takealot you’ll be given access to the Takealot Seller Portal. This is where you manage and supervise everything happening with your Takealot Marketplace Business. The Seller Portal shows your orders, provides tools for you to list new products and export reports so you can understand how your business is performing.
Adding Products to the Takealot Seller Portal
With a few exceptions, you can sell almost any product on the Takealot Marketplace. Before you can start selling your product on the Takealot Marketplace, you need to ensure that the product you wish to sell is part of Takealot’s Product Catalogue.
Takealot has a catalogue of millions of products. These product listing pages, along with images and product descriptions and specifications, have been created by the Takealot Internal Catalogue team and by other sellers submitting product information.
Within the Takealot Seller Portal, you can search this catalogue by barcode or product title to see if your product already exists in the catalogue. If your product is branded and commonly found in retail stores across South Africa there is a high chance the product will already exist in the Takealot product catalogue.
If you have a range of own-brand products that you manufacture or import, it is unlikely that the product will already exist in the Takealot Product Catalogue. In order to sell your product on Takealot, you will have to compile the product information, along with descriptions and images and submit it to Takealot in order for the product listing to be created.
Creating a new product listing for the Takealot Catalogue can be a time-consuming and frustrating process. Currently, all new products have to be submitted via an Excel spreadsheet which is known as a loadsheet. This loadsheet is uploaded from within the Seller Portal and then manually reviewed by the Takealot catalogue team to ensure it conforms to the Catalogue Product Information Rules & Requirements. Once a product is submitted, the approval process can take anywhere between 1 and 14 days. If your listing does not conform to the exact requirements it will be rejected. You’ll then be required to correct the errors and start the submission process all over again. Don’t despair though - this is a valuable experience which makes things a lot easier when the time comes to add more products.
Once you have successfully added products to the Takealot Seller Portal, it’s time to sit back and wait - you are on your way to making your first sale.
'In Stock' vs. Lead time Sales
One of the advantages of selling on Takealot is that they handle all the logistics and delivery of your products to a customer. This requires you to ship your stock to a Takealot Distribution Center (DC). Takealot will use their courier network to deliver your product to a customer.
There are two options for selling your products on the Takealot Marketplace. You can either store your product in Takealot DCs or you can list your products on a lead time and only ship a product to the DC once a customer has placed an order.
[In stock vs leadtime screenshot]
Storing your stock in the Takealot DC has many advantages. Keeping your products in the Takealot Warehouse means they appear as ‘In Stock’ on the product page and Takealot is in a position to pick, pack and ship an order significantly faster. Takealot Customers have a much higher propensity to purchase products that are ‘In Stock’ as they know there won’t be any stock issues and that they will receive them much faster than a product that is only available on a lead time.
Takealot prioritises ‘In Stock’ offers when determining the Buy Box Winner (see below). If you are competing with other sellers on a product and all your offers are priced the same, you will win the Buy Box if your product is ‘In Stock’ and other sellers are selling on a lead time.
However, storing items in the Takealot DCs can incur Storage Fees. While Takealot provides free storage for any product that has stock coverage of fewer than 35 days, storage fees are changed when the stock cover of a product exceeds this.
Formula: Stock Cover = ( Total Stock / Sales unit in the last 30 days ) * 30
The Takealot storage fees are charged per item and can accumulate quickly if not closely monitored. You can avoid being charged Storage Fees by ensuring that you submit a removal order before the end of the month (end of calendar month or end of the 30 days?). Takealot will then pick your stock and make it available for you to collect. Remember that the costs to courier your products to and from the Takealot DCs can also accumulate quickly, so you must keep track of the additional costs and factor them into the pricing of your products.
Selling ‘lead time’ products on the Takealot Marketplace enables you to offer a wide range of products to the large number of Takealot of visitors without incurring significant costs. Additionally, the lead time option enables you to sell your products on other channels, such as your own e-commerce store or other online marketplaces, as the products remain in your warehouse until an order is placed.
Once a lead time order is placed on the Takealot Marketplace you need to ensure that your product reaches the specified Takealot DC by the prescribed date. If your product arrives late, Takealot will cancel the order and you’ll be charged an Order Cancellation Penalty. Additionally, late lead time orders will negatively affect the performance metrics of your Seller Account.
Running a successful Takealot Marketplace business requires striking a balance between ‘In stock’ and lead time items. You need to have a good grasp on your most popular products and most popular lines ensuring that they’re always in stock in the Takealot Distribution Centers and using the lead time option to trial demand for new products and supply slower moving lines.
How the Buy Box Works
One of the most unique features of the Takealot Marketplace is that all sellers who sell the same product appear together on the same product page. However, the ‘Add To Cart’ button is only allocated to one seller. This is called competing for the Buy Box and the seller who is allocated the ‘Add To Cart’ button is the Buy Box Winner. The winner of the Buy Box is determined by a number of metrics but, most importantly price and product lead time. When looking to sell a product you need to be aware of existing or potential competition from other sellers and have a good understanding of the fees Takealot charges and how they affect your product margin.
Understanding the Takealot Marketplace Fees
Listing an item for sale on the Takealot Marketplace is free. However, once a customer places an order for your product a number of charges are incurred. Fees on the Takealot Marketplace are determined by the category, weight and dimensions of your product. While these fees are higher than what you would pay if you made that sale through your own e-commerce store, you need to remember that Takealot handles the customer service, delivery of your product and the running of their website. This allows you to focus on investing in and expanding your product range while Takealot handles the rest.
These fees are summarised as follows:
A monthly subscription fee of R300 (excl. VAT) will be charged for your account whether you sell one item or 10 000.
A fulfilment fee is charged for dispatching your products from the DC to a customer and is based on weight and volume. This fee ranges from a minimum of R32 for something small like a DVD or toothbrush, up to a maximum of R325 for items that are extra bulky like a fridge or dishwasher.
If you choose to store your stock at the DC for quick customer delivery, you will only be charged a storage fee if your stock cover exceeds 35 days. This again depends on the weight and size, and then number items that exceed the 35 days free storage.
Last but not least, every sale you make will come with a success fee, which covers transactional costs and the like. This is worked out at a percentage of VAT and varies by product category, from 4% of VAT to 15% of VAT. For example, at 10% of VAT a cosmetics product listed for R149 will cost the seller R2.24 in success fees. It is worth checking up on these fees regularly as Takealot is constantly adjusting them