Inventory Management on Takealot

[Disa Irrigation]

Hi all, like many small businesses during the lockdown I was forced to pivot my business. This has proven to be rather successful, however, I am now faced with a few hurdles. INVENTORY MANAGEMENT. I sell the goods that I frequently use in the contracting side of my business on Takealot as an additional revenue stream. Takealot has strict rules for order fulfilment so it's really something that has virtually no margin for error.
Challenges:
- Takealot has its own barcoding system, so each item on the inventory management app needs to accommodate 2 barcodes. The extremely arduous workaround is that all incoming goods go through a "manufacturing process" and then becomes a Takealot product.
- Multiple stock locations: 2 x warehouses and then the stock that is actually at the Takealot warehouse.
- Complicated fee structure for goods sold on Takealot makes it difficult for any off the shelf software to calculate landed cost of goods sold and thus accurately determine profit margins.
- I have to an extent been managing this successfully in a number of excel spreadsheets, but the chance of human error is enormous and as the range of products I sell grows this will eventually become unwieldy and unmanageable.
- The majority of inventory management software and apps are extremely expensive. I am looking for something that has a low entry to the market that is scalable as this section of my business scales.
- it's almost like a chicken or the egg scenario. The business needs a good system in place in order to successfully scale but can't afford the extremely expensive fees...

If there are any other Takealot sellers out there that can share their experience it would be greatly appreciated. I have a few tips and tricks of my own that I am more than happy to share

 

[InvisibleJim]

There are a few good open source ERP systems which you could look at. You can host yourself or pay for a supported SaaS offering.

ERPNext and Flectra might be suitable for you but there are many others as well.

 

[Acelin]

Hi, would you be interested in a no obligation discussion around SAP Business One. I think we might be able to assist you, or I can send you some some info if you like.

 

[mister]

Hi, would you be interested in a no obligation discussion around SAP Business One.

Yes, let's have the discussion here.

 

[BuxBuckus]

Have you managed to get a solution for this, i am sittting with the exact issue

 

[Disa Irrigation]

Have you managed to get a solution for this, i am sittting with the exact issue

Hi BuxBuckus, to be honest, I haven't got anything satisfactory on the inventory side. Andrew Forte has a YouTube channel that has been immensely helpful to me and I have implemented many of his tips and tricks. Inventory tracking however is still a major shortfall in managing Takealot stock efficiently.

My findings so far are that anything that integrates with Xero (my accounting software) is prohibitively expensive for the size of my operation. So it comes down to the chicken and the egg scenario. Need an effective software to manage the inventory in order to scale operations but the capital outlay is more than what should be spent at this stage given the size of the operation.

Check Andrew out @ https://www.youtube.com/c/AndrewForte1

If you do ever come up with a good solution please let us know on this thread

 

[ajv]

Hmm, wonder if there are enough people out there with these issues that could warrant the development of a "Takealot inventory management as a service" product

 

[Affieplaas]

Some questions:

- In order to calculate Cost of Sales, do you use the perpetual inventory system or periodic inventory system? In other words, does Xero calculate average cost per SKU or do all stock purchases go as an expense and you then do a month end stock take at which time a general CoS is calculated?
- I assume the 2 warehouse that you use is for your normal business and you then have a further warehouse for Takealot. Are the actual Takealot items kept at the Takealot DC or do you simply issue and deliver an item to Takealot at the time that you get a sale?
- Does Takealot invoice you for sales commission/fees? I would assume so as they receive the money from the sale to the end client and then need pay that over to you minus costs. You will then need to receive some sort of settlement statement from them indicating these costs.

Are you not trying to over complicate things. The standard business process should be:
- GRV all stock receipts against your own SKU. The system calculates the average cost based on your purchase price. Stock is receipted in your own warehouse location(s).
- Create a separate SKU for items to be sold via Takealot with the Takealot barcode.
- Once you move stock to the Takealot location, this is done via an in-warehouse transfer. During this transfer, also issue the stock from the main SKU to the Takealot SKU. The accounting system should auto calc the Takealot average cost based using the average cost at the time of the main SKU.
- When you receive the statement from Takealot for items sold, create a sales invoice with Takealot as the customer. Invoice the item at the full listing price using the Takealot SKU from the Takealot warehouse location (thereby you have continuous stock level tracking). On the invoice create negative GL line item postings for the fees that Takealot charge. It won't be possible to do this per SKU if you have thousands of SKU's that you sell, the admin will be too much, do a sales fee GL code per category. The total value of the invoice should balance with the amount that Takealot will settle to you.
- Once you receive the cash, allocate it against the Takealot debtor in your cash receipts journal.

Your sales value will be the full retail sales value that the item was listed for on Takealot - you need to pay output VAT on this amount.
CoS will be the average cost of what the item has cost you when you bought it. Sales and CoS are usually per category as you can allocate a
You will have a GL expense line for Takealot sales fees per category. You should be able to claim input VAT on this. The VAT report should auto account for this VAT as you had these costs as negative lines on the sales invoice.
Since you have a separate Takealot stock warehouse and separate Takealot SKU's, you will be able to keep constant track of stock on hand at the Takealot location.

https://www.sage.com/en-za/products/sage-50cloud-pastel-partner/
Pastel Partner can do all this for about R1000 per month. I'm not that familiar with Xero's inventory functionality but if it allwos you to have multiple stock warehouses and do in warehouse transfers and inter SKU transfers it will be able to facilitate the standard business process.

 

[BuxBuckus]

Hi BuxBuckus, to be honest, I haven't got anything satisfactory on the inventory side. Andrew Forte has a YouTube channel that has been immensely helpful to me and I have implemented many of his tips and tricks. Inventory tracking however is still a major shortfall in managing Takealot stock efficiently.

My findings so far are that anything that integrates with Xero (my accounting software) is prohibitively expensive for the size of my operation. So it comes down to the chicken and the egg scenario. Need an effective software to manage the inventory in order to scale operations but the capital outlay is more than what should be spent at this stage given the size of the operation.

Check Andrew out @ https://www.youtube.com/c/AndrewForte1

If you do ever come up with a good solution please let us know on this thread

Thanks so much, will stay in touch, came across an interesting page on facebook with other sellers and their experiences https://www.facebook.com/groups/takealot

 

[Disa Irrigation]

Some questions:

- In order to calculate Cost of Sales, do you use the perpetual inventory system or periodic inventory system? In other words, does Xero calculate average cost per SKU or do all stock purchases go as an expense and you then do a month end stock take at which time a general CoS is calculated?

Xero as a standalone software doesn't manage inventory all that well. You have two options:
(1) Tracked Inventory Items: This system will keep track of the quantity in stock, the value of the stock and doesn't to the best of my knowledge generate an average cost per SKU. Where it falls short for me is it doesn't allow for multiple warehouse locations.
(2) Non tracked Inventory keeps track of sales and purchases of an item - also doesn't work out average cost per SKU - a major shortcoming in my opinion.

Currently, I do a periodic stocktake, but would prefer to have a perpetual system

- I assume the 2 warehouse that you use is for your normal business and you then have a further warehouse for Takealot. Are the actual Takealot items kept at the Takealot DC or do you simply issue and deliver an item to Takealot at the time that you get a sale?

You assume correctly, own warehouse and Takealot DC. I have in stock offers and I fulfil some orders of slow-moving items as lead-time orders as in the order comes in and then I drop it off at the relevant Takealot DC. It would actually be preferential to have 3 warehouse locations as Takealot has a stock keeping KPI that insists that we keep at least 60% of our stock across both DC's, so ideally we should be able to differentiate between the DC's.

- Does Takealot invoice you for sales commission/fees? I would assume so as they receive the money from the sale to the end client and then need pay that over to you minus costs. You will then need to receive some sort of settlement statement from them indicating these costs.

Correct

Are you not trying to over complicate things. The standard business process should be:
- GRV all stock receipts against your own SKU. The system calculates the average cost based on your purchase price. Stock is receipted in your own warehouse location(s).
- Create a separate SKU for items to be sold via Takealot with the Takealot barcode.
- Once you move stock to the Takealot location, this is done via an in-warehouse transfer. During this transfer, also issue the stock from the main SKU to the Takealot SKU. The accounting system should auto calc the Takealot average cost based using the average cost at the time of the main SKU.

This would be great - Xero does not offer this functionality.

- When you receive the statement from Takealot for items sold, create a sales invoice with Takealot as the customer. Invoice the item at the full listing price using the Takealot SKU from the Takealot warehouse location (thereby you have continuous stock level tracking). On the invoice create negative GL line item postings for the fees that Takealot charge. It won't be possible to do this per SKU if you have thousands of SKU's that you sell, the admin will be too much, do a sales fee GL code per category. The total value of the invoice should balance with the amount that Takealot will settle to you.

Agreed

- Once you receive the cash, allocate it against the Takealot debtor in your cash receipts journal.

Your sales value will be the full retail sales value that the item was listed for on Takealot - you need to pay output VAT on this amount.
CoS will be the average cost of what the item has cost you when you bought it. Sales and CoS are usually per category as you can allocate a
You will have a GL expense line for Takealot sales fees per category. You should be able to claim input VAT on this. The VAT report should auto account for this VAT as you had these costs as negative lines on the sales invoice.
Since you have a separate Takealot stock warehouse and separate Takealot SKU's, you will be able to keep constant track of stock on hand at the Takealot location.

I like this idea, but again Xero does not allow for this and the workaround is too onerous and not practical from a time point of view. There is also one other shortcoming that I forgot to mention Xero does not allow for assemblies or package deals. (Buy in 5 units and repackage it into packs of 5 for example)

https://www.sage.com/en-za/products/sage-50cloud-pastel-partner/
Pastel Partner can do all this for about R1000 per month. I'm not that familiar with Xero's inventory functionality but if it allwos you to have multiple stock warehouses and do in warehouse transfers and inter SKU transfers it will be able to facilitate the standard business process.

Will definitely look into this. I shudder to think of the amount of work transferring everything to Pastel and my accountants work exclusively off of Xero. So will have to give this some serious consideration

 

[Affieplaas]

Ok,

You need something with inventory management functionality. What you want to do is relatively standard processes but of course your accounting system must have the capability.

I'm a CA specialising in business process optimisation and I was a Pastel consultant for 7 years during my articles (so long ago it feels like it was in a previous life) so I can give you some advise on how to do all of this using an accounting system that has inventory management but I know very little about Xero's functionality and through what you described I understand your issue with your current accounting setup.

 

[J_JVV]

Have you tried www.stockburst.co.za? They offer inventory management, accounting and automated buy box for takealot sellers.

 

[Sir Bob]

I work at an accounting firm that is a Xero partner and has a cheaper inventory management system.
Pm me if you would like to set up a no strings attached chat.

 

[Peterpan89]

Have you managed to get a solution for this, i am sittting with the exact issue

Some software launched recently that has all of this sorted. Their website is www.stockburst.co.za

 

[airborne]

Some software launched recently that has all of this sorted. Their website is www.stockburst.co.za

One post wonder!

 

[Peterpan89]

One post wonder!

Well I mean. You see someone has an issue. For the first time you can help with an answer, and then you create an account. Should I have not helped because it’s my only post?

 

[Heisenborg]

Well I mean. You see someone has an issue. For the first time you can help with an answer, and then you create an account. Should I have not helped because it’s my only post?

Depends, is stockburst your company?

 

[Peterpan89]

Depends, is stockburst your company?

No it is not. I am a Takealot seller that saw their branded car and checked out the website. If it was my company, I would have posted here anyway, why not? It is the resolution to the problem on the thread above

 

[airborne]

No it is not. I am a Takealot seller that saw their branded car and checked out the website. If it was my company, I would have posted here anyway, why not? It is the resolution to the problem on the thread above

Hey sassy pants, don’t get frisky round here!
Jokes, enjoy your stay at hotel Mybb

We always call out potential shills because they waltz in like we were born yesterday and try surreptitiously push their product without just coming out and stating the obvious. It looks like the Takealot support software market is opening up, appears there are a few options out there now specifically targeting software solutions for Takealot sellers.

Going by the FB group I’m on, selling on Takealot is a bit of a nightmare, from stock shrinkage at the Dc to fighting to get your sales paid out, not a walk in the park.

 

[Peterpan89]

Hey sassy pants, don’t get frisky round here!
Jokes, enjoy your stay at hotel Mybb

We always call out potential shills because they waltz in like we were born yesterday and try surreptitiously push their product without just coming out and stating the obvious. It looks like the Takealot support software market is opening up, appears there are a few options out there now specifically targeting software solutions for Takealot sellers.

Going by the FB group I’m on, selling on Takealot is a bit of a nightmare, from stock shrinkage at the Dc to fighting to get your sales paid out, not a walk in the park.

Yes. There is a LOT of theft and scams going on within the Takealot model. As long as you don’t sell high end products, you should be fine.