Takealot is the Amazon equivalent in South Africa for online shopping with the majority of market share and maybe this will change once Amazon open up properly. Those that supply Takealot know it is not a sooth ride and there are many challenges as they as a company are now experiencing issues Amazon must have in the past.
This week the Distribution Center 3 commonly known as DC 3 which is based in Johannesburg informed it's suppliers they are now full. No more stock is to be delivered until further notice. This was the stock on hand warehouse that distributes items as they are sold on their platform.
Like all sales platforms they have a performance related score for every supplier ad if you drop below a certain number you receive penalties or even worse have your account suspended. The stock in this warehouse works on a 3 day delivery time depending where you are in the country.
What this means for a business like ourselves is that now as items are sold if there is no stock on hand in the warehouse they have to be delivered as required which now extends the delivery time by up to another 2 days so we have suddenly moved from a 3 day delivery window and ow see a 5 day delivery window.
Stock being delivered has to be booked in advance so stock sold today may only get a delivery slot in 2 days time as tomorrow is already fully booked. The scary part is most suppliers are waiting for Black Friday stock to hit the ports and they would have planned for these items to be delivered straight into this DC 3 warehouse. We have a warehouse so this is not a big problem, but many of the online companies have no storage facilities.
The knock on effect that I ca see happening here is that the delivery slots will suddenly move from a 48 hour window and we shall see 96-120 hour booking slots so items sold will take up to 10 days for delivery. This is seriously bad planning and somebody should be getting the chop for this, but as we all know nothing will happen. I am amazed that no one had the foresight to envision this scenario and why companies like this employ specialists.
I am thinking has their business model changed and is the bulk of the items that are filling the warehouse being Takealot controlled ie they are the suppler competing with other suppliers. This is how all these online retailers work as their modus operandi is to eventually replace suppliers with themselves making all the profit.
The only suppliers that are protected are those that have the license to sell their brand or are the manufacturer of that item. I am not sure what is going to happen as we are only 50 days away from Black Friday and the wheels have already come off. Amazon has launched in South Africa, but most of their prices are not competitive especially on items from over seas. I thought their distribution network would make their pricing competitive, but quite the opposite with their pricing being very far off.
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