Amazon Courts South African Small Businesses With 5% Fees

Eighty-six percent of South African small and medium-sized businesses already generate sales online, and Amazon wants the remaining growth bottleneck — logistics — to be its opening into the market.

The figure comes from the Small Business Digital Adoption Report, released on Tuesday. World Wide Worx, an independent technology research firm commissioned by Amazon, surveyed 1,400 South African SMEs for the study. The findings frame Amazon's pitch: local businesses have solved the getting-online problem, and now need partners to scale.

What did the survey actually find?

The data describes a mature, hybrid retail market rather than a digital frontier.

• 86% of respondents generate sales online, yet only 32% of online sellers use major marketplaces.
• 62% of active online sellers name logistics and delivery as a major challenge; 46% struggle with returns management.
• Only 5% cite connectivity and 12% cite payment systems as obstacles.
• Nearly two-thirds of surveyed businesses have sold online for at least six years.
• 76% also maintain a physical store presence.

The obstacles have shifted from infrastructure to operating costs. The report found 48% of respondents concerned about ongoing subscription and administration fees, while 41% cited digital transaction fees.

"We expected to find a market that was still wrestling with the basics of getting online. Instead, we found a market that has moved past that stage and is confronting an entirely different set of challenges," Arthur Goldstuck, CEO of World Wide Worx, said at the launch on Tuesday.

How is Amazon positioning itself?

Suzelle Abe, Amazon South Africa's head of marketplace, said the task has changed. "The question is no longer whether they can sell online, but how do we get them the right partnerships, networks and tools to help them scale to the next level," she said. She argued marketplaces let businesses consolidate online operations while reaching a broader customer base and infrastructure they could not build independently.

The core offer is Fulfilment by Amazon (FBA): sellers ship inventory to Amazon's network, and the company handles storage, picking, packing, shipping, customer service and returns. That promise comes with a caveat Amazon itself acknowledges — the fees. Robert Koen, Amazon's managing director for sub-Saharan Africa, told TechCabal on Tuesday that businesses should compare the full cost of running their own e-commerce operation against marketplace charges.

"Building your own website, buying the books, hiring your own team and having someone manage all those activities are significant costs. Sometimes those costs aren't factored into the equation," Koen said.

What does it cost sellers?

Amazon is currently offering referral fees of around 5%, alongside fulfilment fee promotions, to encourage South African businesses to join. That headline rate is not the total cost of selling; fulfilment and other charges also eat into sellers' margins. Koen's argument is that the comparison still favors the marketplace.

"If you put the two profit-and-loss statements side by side, even after accounting for the fees, it can be a no-brainer for sellers," he said.

For a small business already worried about recurring digital costs — nearly half of those surveyed — the total bill, not the advertised rate, will decide whether that claim holds.

Is export the bigger prize?

Amazon operates marketplaces in 23 countries, and Koen framed South Africa as a stepping stone to international customers. "Once they understand how the South African marketplace works, listing products in the United States, United Kingdom, Brazil, Egypt or other markets is almost identical," he said.

He said international listings could create additional export income and contribute to economic growth. He also conceded that expansion abroad requires businesses to navigate market-specific regulations, logistics and costs — the same friction, exported.

Amazon is backing the push with a fulfilment network, nearly 5,000 pickup points and AI-powered tools, built on more than $2.5 billion it has invested in South Africa over the past decade — roughly $250 million a year. Whether sellers accept the fee math, rather than the survey findings, will determine if that investment converts into marketplace share.