IT Services17.10.2023

Amazon vs Takealot — South African seller fees and delivery options compared

Amazon plans to offer South African sellers a wider range of warehousing and delivery options on its platform than Takealot does, while initially charging substantially lower monthly base fees.

After months of speculation, Amazon announced today that it would launch an online store in South Africa next year.

Rumours of an imminent launch of the Amazon.co.za marketplace emerged in January 2022 after an industry source told MyBroadband that the company was shopping for warehouse space.

These were followed by the company securing local warehouse space for its fulfilment centres in 2023 and advertising for at least 30 full-time positions at the division.

The launch was initially planned for February 2023 but was delayed due to Amazon focusing on cutting costs.

Amazon has now confirmed its local launch plans and enabled a public-facing portal that provides details for businesses that want to sell their products on Amazon.co.za.

It includes information like the fees they must pay to become sellers and what storage and shipping packages they can use.

Since its launch in 1994, Amazon has become the world’s biggest e-commerce company and made founder Jeff Bezos one of the wealthiest people in the world.

In South Africa, its biggest rival will be Naspers-owned Takealot, the top local online store that offers

Industry experts believe Amazon could threaten Takealot’s top spot thanks to its strong logistics network that enables fast and efficient delivery services.

In response to Amazon’s announcement, Takealot told MyBroadband it believed any competition was healthy for South Africa’s economy, the sector, and shoppers.

Key to the success of Amazon’s online marketplace in South Africa will be its ability to attract merchants to its Seller programme.

According to the Amazon.co.za Seller sign-up page, Amazon is offering two merchant plans in South Africa — Individual and Professional.

Individual is aimed at sellers dealing in smaller volumes — with fewer than 40 items sold monthly. It also excludes advanced selling tools and programmes.

Amazon will charge a base fee of R10 per item sold for this plan, not including additional selling fees.

The Professional plan is priced at R400 per month and is aimed at sellers who want to ship over 40 items per month.

As an early incentive for sellers to join the platform, Amazon will only charge R1 per month for Professional until 31 December 2024.

Additional fees and shipping options

In addition to the base subscription fees, Amazon Sellers are charged a referral fee equivalent to a percentage of the product’s price.

The percentage ranges from 6% to 15%, depending on the product category, but will always be a minimum of R10 per sold product, excluding VAT.

The base fees and referral fees will apply regardless of the shipping option sellers choose.

A seller then has three options when it comes to storage and shipping.

The most bare-bones option is to only list your products on Amazon, store them yourself, and carry the shipping cost.

Alternatively, Amazon allows a seller to use their own warehouse but have Amazon handle the deliveries — a service it calls Amazon Easy Ship.

With this option, Amazon will charge merchants a minimum of R20 per shipment, excluding VAT.

The most comprehensive package — called Fulfilment by Amazon (FBA) — includes your product listings, Amazon warehouse storage, and delivery by Amazon.

The fulfilment fee, covering logistics and delivery, will start at R27 per unit, excluding VAT. Unit prices increase with weight.

The monthly storage fees will be based on the daily average volume of space the seller occupies in the warehouse, measured in cubic metres.

Long-term storage fees will apply for products that have been in an Amazon warehouse for over 365 days.

Amazon’s Selling plans in South Africa

Interestingly, the regular R400 base monthly Selling fee for Amazon’s Professional plan is exactly the same amount that Takealot charges its merchants.

Takealot only offers a single plan and does not let sellers use their own storage facilities or delivery companies.

Therefore, its offering should be compared with Amazon’s FBA package, as it covers all logistics.

Takealot’s success fees — the equivalent of Amazon’s referral fees — are also calculated using a percentage of the selling price.

Similarly, this varies from one product category to the next. However, unlike Amazon, Takealot’s fee percentage ranges within the same categories.

For example, Takealot can charge success fees ranging from 4% to 12% in the Camera category, where Amazon charges a set 6%.

While many categories are shared between the two companies, Takealot divided its products across more categories — 30 — versus the 20 that Amazon uses.

Takealot’s success fees can be as low as 5% and max out at 18%, depending on the category.

Amazon and Takealot both provide calculators on their respective portals to determine the cost of shipping products on their seller programmes based on their weight and dimensions.

However, Amazon had not yet activated its FBA revenue calculator for the South African marketplace by the time of publication.

The table below compares the prices of Amazon and Takealot’s seller fees — including base, success/referral fees, and fulfilment costs.

Amazon vs Takealot Seller fees in South Africa
Amazon FBA Takealot
Base fee R400 per month
(R1 per month until December 2024)
R400 per month
Fulfilment fees Starting from R27 per unit Starting from R20 per unit
Referral/success fees Minimum 6%
Maximum 15%
Minimum 4%
Maximum 18%
Baby products 13% 12-15%
Beauty 13% 10-15%
Books 14% 14%
Cameras 6% 4-12%
Consumer Electronics 13% 5-14%
Health and Personal Care 10% 10-12%
Home and Kitchen 13% 15%
Home Entertainment 10% 10-15%
Home Improvement / DIY 11% 10-12%
Office Products 10% 7-12%
Outdoors 14% 8-15%
PC 9% 5-9%
Personal Care Appliances 10% Not specified
Pet Products 10% 10%
Sports 15% 12-15%
Tools 11% 10-12%
Toys 12% 12%
Video Games 10% 5.5-15%
Wireless 8% Not specified
Everything else 12% Not specified

Now read: Uber Eats drivers can now deliver powerbanks in South Africa

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