1.In terms of commissions, cross-border stores are 2 to 3 percentage points more expensive. Takealot charges cross-border sellers an additional cross-border surcharge; with monthly sales of 100,000 rand, this amounts to an extra 20,000 to 30,000 rand per year.
2. In terms of logistics, each order is shipped three times. Domestic stores charge 12 to 18 rand per order, while cross-border stores charge 35 to 55 rand per order. Based on 6,000 orders per year, the difference in shipping costs alone amounts to 180,000 rand.Even more important is delivery time: 1 to 3 days for domestic stores, and 7 to 20 days for cross-border stores.
3. Due to customs duties and VAT, we incurred a loss of 15% to 24% before the goods were even sold.When goods from cross-border stores arrive in South Africa, import duties range from 5% to 20%, and VAT must be paid at the time of import, plus a customs clearance fee of 200 to 500 rand per shipment.However, local stores don't have to pay a single cent of this amount.
4. When it comes to returns, cross-border stores are a hidden threat. The return rates for cross-border stores ranged from 7% to 10%, while those for domestic stores ranged from 4% to 6%.Most cross-border returns can only be discarded or sold at a discount, whereas domestic stores can resell them.
5. In terms of inventory, all funds tied up in goods in transit are dead capital.With sea freight taking 30 to 45 days in transit, that means the inventory ties up capital for at least 1 to 2 months without generating any revenue. Local stores can restock quickly—the speed is completely different.
6. In terms of cash flow, there are about ten fewer cycles per year.Cross-border stores take 30 to 45 days to settle, while domestic stores take 7 to 14 days. With the same amount of capital, domestic stores can turn over their capital more than 20 times a year, while cross-border stores do so fewer than 10 times.
7. In terms of conversion rates, the same amount of traffic can result in different numbers of orders.Conversion rates for cross-border stores ranged from 1.51 TP3T to 31 TP3T, while those for domestic stores ranged from 31 TP3T to 51 TP3T. With the same 100 visitors, domestic stores generated 1 to 2 more orders, and over the course of a year, the difference becomes clearly visible.
