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  • Growing Your Business

    In this section we deal with all aspects of growing a business.

    In this section
    Sales Channels
    Advertising, Sales & Marketing
    Sales Channels & Marketing Activities

  • Sales Channels
    What are your sales channels, or the places where you will sell your products? If you’re selling online, your online store is a sales channel. If you also have a physical store, that’s another sales channel.

    Where will you sell your product/service

  • bidorbuy

    Bidorbuy.co.za is a E-commerce website based on both a auction and online marketplace ("buy now") model. Bidorbuy is used by both individuals and companies and thus it can be described as both a B2C and C2C platform and thus it allows people to sell once off items they don't need, as well as being used by home-based small businesses as well as formal businesses to trade.
    bidorbuy does have an national advantage over other classified platforms such as Gumtree in that it has a verified seller and rating system, this helps to facilitate to province to province trade in a way that Gumtree cannot.
    • By Ken
    • 8 views

    Makro Marketplace

    The Makro Marketplace is an online marketplace where retailer Makro allows third parties to list and sell their products on their website (www.makro.co.za). The seller determines the selling price and Makro facilities the transaction between seller and customer and Makro takes a commission based on the selling price. Makro claims 1.5 million customer visits per month, 15 million searches and over 80 different product categories on their marketplace.
    Getting Started
    First step to sell on Makro.co.za is to sign up, add contact information, business details, company details and payment information. Then you upload your products (new products only), pricing and stock on hand. Once your products are published it will be made available on www.makro.co.za. You have a seller portal to view all orders, once an order comes in you have to pack each order individually and let Makro know when it is ready for collection. Makro will then send a courier to collect from you and deliver to buyer. You then get paid 15-30 days after delivery.
    All products added are moderated. All products in all categories require approval and can be only listed with Makro permission which is strictly moderated to maintain quality.
    Who can sell?
    Anyone with a registered business, valid VAT number (compulsory) and current tax clearance certificate who sell new and genuine products are welcome to start selling. You also need a minimum of 10 products to sell.
    Unlike Takealot.com Makro delivers directly from you to the customer, Makro claims in future they will have a fulfilment service where they will "handle warehousing, picking, packing and shipping of your products. There will however be an additional charge for this service." Which will make them resemble Takealot a bit more; Unlike Takealot, Makro does not charge a monthly fee.
    Fees
    Makro charges a commission on each successful sale, based on order value of product. This percentage differs category to category. Makro does not publicly post these commissions.
    • By Ken
    • 8 views

    Takealot Marketplace

    Takealot.com is an online marketplace, South Africa's largest online retailer and the closest thing that South Africa has to Amazon.com. Like Amazon, Takealot allows third party sellers to sell on their platform. In 2019 Takealot CEO Kim Reid claimed they had 2600 such businesses using their platform, he also claimed that Takealot had between 1.8 million and 1.9 million customers. Takealot infrastructure includes three distribution centres (Western Cape, Kwa-Zulu Natal and Gauteng) totalling 75 000m2 as well as 50 pickup points in all nine provinces. 

    Getting Started
    In order to sell on takealot, you have to go through a vetting process to see if you would be a good fit for their marketplace. This starts with an application where you have to tell them about your products and services, they will then assess, approve or reject your process. Once accepted you can register and start selling your products.

    Is Takealot.com the right platform for you?
    Takealot.com is a household brand with a large advertising budget and lots of traffic/users. However Takealot has a lot of fees to take into consideration and a very generous return policy that will impact sales as well.

    Fees (all excluding vat)
    Monthly fees (just to use the platform)
    Every seller on Takealot's marketplace has to pay a subscription fee of R300 per month, 
    Seller fees (Success fees - the commission Takealot takes when you make a successful sale)
    it also has a comprehensive fee structure, its fee booklet runs into 97 pages! Fees start at 5% and run up to 18%. These fees are charged as a percentage of the VAT inclusive selling price per item sold and is credited for returned items.
    Fulfilment fees (to ship item from Takealot warehouse)
    Fulfilment fees start at R25 and go up to R325 based on weight and size.
    Before I go to storage fees, I need to explain something: there are two ways to sell on Takealot: stored at their warehouse and via lead time. 
    Stored at their warehouse means you take a few products to be stored at the Takealot warehouse and the order is fulfilled as soon as it comes in.
    Lead time means that you deliver the products to Takealot only once orders come in for it.

    This is an important difference as stored at their warehouse has storage fees (after 35 days). While this will not be a problem for fast moving stock, it will be a problem the longer your stock remains unsold and will quickly eat into your profit. Both attract the fulfilment fee mentioned above.

    Storage fees (After 35 days)
    Storage fees  is charged at per item per month and starts at R4 all the way to R1800 depending on the size of the item. Takealot measures this in cm3 (cubic centimetres). 
    Is Takealot a good platform for small businesses to sell on?
    The short answer is no, it is simply too expensive, the longer: it depends, Takealot has trust and traffic, that being said Takealot Marketplace benefits only itself, it might be ruinous to sell on. While Takealot can certainly be considered just another online sales channel you should tread very carefully.

    Risks
    For small businesses Takealot posts significant risks. 
    Types of products
    Looking at Takealot's high fulfillment fees, it is clear that this marketplace is not for everyone, lower priced items simply cannot be sold here (unless you sell in bulk).
    Free Returns
    Takealot's policy of free returns and "we're only happy when you are" is a policy that can only be sustained by a venture backed company or once with a benefactor such as Naspers. This policy has created a mindset among people that is different to one whereby people have to pay for returns, it makes people more responsible buyers. Small businesses cannot absorb the losses that Takealot can.

    Fees
    Takealot's commissions and fulfillment fees are excessive and will prove too much for many small businesses. Couple this with returns and storage fees and you might even run into a loss or have most of your profit eaten.
    Takealot Seller Success Fees

     
    • By Ken
    • 8 views

    Online Marketplace

    An online marketplace is an E-commerce website where product or service is provided by multiple third parties. This is in contrast to a businesses own Ecommerce website where only that business sell products. Some online marketplaces act as solely a platform connecting buyer and seller, while others such as Amazon and Takealot in South Africa not only sell their own products but also have their own logistics (warehousing and distribution) infrastructure. 
     
    • By Ken
    • 5 views

    Ecommerce Website

    An Ecommerce website is a website that sells products and services and accepts payment over the internet. In this context we refer it to a website that is owned by the company (running their own website) and not a third party "platform" website. It also means that only you are selling products on that website.
     
    • By Ken
    • 8 views

    Online

    The online sales channel means doing business (selling) over the internet. This can be from your own Ecommerce website or from other online platform type websites.
    • By Ken
    • 6 views

    Brick and Mortar

    Brick and Mortar (also called a "offline sales channels") refers to doing business from a physical building rather than doing business on the internet (online). This can mean both from a building (shop, office) that you are renting or or own or from a other company's building that you are a supplier to.
    • By Ken
    • 3 views
  • Advertising, Sales & Marketing
    About advertising sales & marketing. More...
    Marketing Mix
    Marketing Activities
    How will you market / advertise your business

    How this section fits into your business plan:

    Sales & Marketing

    Sales Channels & Marketing Activities
    How do (or will) you market your products?

  • Gumtree

    Gumtree is an online free to use consumer-to-consumer horizontal (mixed category) classifieds portal also used by some businesses. It has both free and paid advert options. Gumtree is mainly monetised by text and display adverts. In South Africa Gumtree is the largest C2C (consumer-to-consumer) classifieds platform followed by OLX.
    Gumtree is a great place to advertise hyper-local (within your area) and local (within your peninsula or province), it is highly traffic and highly ranked in search engines and a basic advert is free. Gumtree does not do too well in national adverts (buyers from other provinces) as unlike bidorbuy it does not have a verified seller program or rating system and there has been reports of scammers using the site. Gumtree has in the last decade or so made certain statistics available such as age of account, whether poster has a verified Email and the amount of adverts the user has posted which helps establish trust. However there is no recourse if you are scammed.
    I have sold province to province on a few occasions. Twice I had offered buyers in other provinces that I would list the item on my bidorbuy verified account which is over a decade on and has 100% positive ratings, the last time I shipped to Durban after sending the buyer by bank details without using bidorbuy. So it can be used as a lead generation tool in that way or to refer people to your website if you have one.
    Gumtree is often referred to as a "community website" due to its roots, even though it was acquired by eBay in 2005. Gumtree started in London in 2000 as a way to connect people from Australia, New Zealand and South Africa moving to the UK find accommodation, employment and friends. This South African connection has made it the most popular online classifieds website in South Africa larger than even the Naspers backed and owned OLX.

    Gumtree South Africa has changed its focus away from the friends' aspect in the last decade; it used to have Craigslist style "personal" ads for romantic partners and but has recently focused on the three most popular commercial ads: property, automotive and jobs (which are also popular with vertical classifieds).

    However this roots is important to understand as Gumtree still has strict rules in place as to what is and what is not allowed on its website. Gumtree should thus be seen as a consumer-to-consumer portal also used by businesses. It has strict policies and a long list of what is not allowed:
     
    • By Ken
    • 14 views

    sb2sb.com Listings

    sb2sb.com Listings is a B2B (business-to-business) online classifieds platform. Our main target market is entrepreneurs selling to entrepreneurs. Our future plans is to turn our listings into a fully-fledged Ecommerce platform (sales channel) where sellers  sell their products and services and can receive payments directly. 
    • By Ken
    • 3 views

    Classifieds

    Classifieds is a form of advertising found in newspapers, magazines (both print) and online (internet). Online classifieds has gotten popular in recent years as more and more people have accessed the internet. Online classifieds also has other advantages over print such as it has benefits such as longer adverts and ability to add images.
    Classifieds exist to connect buyer and seller, fundamentally they adopt two different business models and strategies: free vs. paid horizontal vs vertical.
    Free vs. Paid
    This determines whether or not you are charged to post an advert, Gumtree and OLX are example of free classified sites while Private Property and Cars.co.za are examples of paid classifieds. Free classified sites are often monetised by advertising (both text and display ads) and by selling "featured ads" adverts in more prominent positions. Paid classified sites on the other hand mostly charge per listing, as of writing Private Property has three listing options: R999, R1995 and R3495 whereas Cars.co.za has two options: R299 and R449.
    Horizontal vs. Vertical
    Horizontals (also known as general) classifieds are classified with numerous different categories whereas vertical (also known as niche) is usually a single industry or a very small group of related industries. Gumtree and OLX are examples of horizontal classifieds while Private Property (property) and Cars.co.za (vehicles) are examples of vertical classifieds.
    • By Ken
    • 9 views
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