South African small businesses are increasingly facing mounting operational pressures, as delivery, fulfilment and the high costs of returns management emerge as the biggest challenges to sustaining online sales.
New research commissioned by Amazon and conducted by independent technology research organisation World Wide Worx reveals that improving access to digital sales channels alone will not necessarily translate into sustainable growth for smaller retailers.
Reducing the cost and complexity of delivery, fulfilment and reverse logistics will also be critical to ensuring online sales remain commercially viable, it states.
The findings of the Amazon Small Business Digital Adoption Report 2026 were presented yesterday during a media briefing, in Johannesburg.
The research was conducted among 1 400 SMMEs between April and July 2026, examining how SMMEs use digital technologies to operate, reach customers and sell online.
According to the study, logistics and delivery are the leading operational barriers facing local SMMEs, with 62% of active online sellers identifying them as a challenge, followed by returns management at 46%.
While the survey does not represent the full spectrum of South African small enterprises, it is largely a reflection of the nationwide SMME landscape of established, urban and digitally-active businesses.
Speaking during the event, World Wide Worx MD and research author Arthur Goldstuck said the research indicates the operational challenges facing small businesses have shifted from establishing an online presence, to managing the fulfilment process.
“A fulfilment crisis has taken its place. The majority of online sellers in SA cite logistics and delivery as their primary operational challenge, while less than half point to returns management,” noted Goldstuck.
Under pressure
“The friction has migrated from the front end of the digital journey – getting online, accepting payments and reaching customers – to the back end: moving products, processing returns and absorbing the cumulative costs of each transaction.
“The findings highlight the growing financial and operational pressures associated with e-commerce, particularly for smaller businesses that lack the distribution networks, warehousing capacity and resources of larger retailers.”
According to Goldstuck, the challenge extends beyond the initial delivery of purchased products.
Delivery and logistics challenges can prevent digital SMMEs from meeting customer requirements, managing inventory smoothly and effectively, controlling operating costs and maintaining a stable cash flow, he explained.
In addition, online sellers often face a significant financial loss due to reverse logistics because return rates on items purchased online are approximately two to three times greater than those of traditional brick-and-mortar stores.
Reverse logistics – the process of collecting, transporting, inspecting and processing products returned by customers – are often associated with additional costs, and returned goods may sometimes be damaged or not resalable.
For smaller businesses, this can mean paying for the original delivery, absorbing return-collection costs and potentially covering replacement shipping, while also dealing with refunds and inventory that may be unavailable for resale during the process. The financial implications depend on the size of the businesses involved.
The report found that 74% of the surveyed SMMEs employ 20 or fewer people, limiting the resources many have available to establish their own warehousing, distribution and returns-processing operations.
“I think it's tough as a small business to achieve what customers expect: that fast delivery, the great value for money and the broad selection of products. And I think for a small business, it's very often hard to keep up with those customer demands, especially the speed at which they want it,” added Goldstuck.
“It's more the complexity of the process than it’s possibly losing money on the sale of the product. The key issue is that it's costing them money to manage the process. We have also identified that in our Online Retail Research, which reveals that the complexity and cost of managing the after-sales support is often the core problem.”
The report notes that recurring expenses, rather than once-off setup costs, are weighing more heavily on businesses. Some 48% of SMMEs identify ongoing subscription and administration fees as financial barriers, while 41% cite digital transaction fees. Only 14% identify initial setup costs as a concern.
A business that appears profitable on paper may be steadily eroded by the compounding cost of marketplace fees, logistics charges and returns processing, Goldstuck pointed out.
Marketplace advantage
The study further reveals that among the SMMEs surveyed, 99.6% use the internet for business and 86% generate online sales.
However, only 32% of active online sellers use a major marketplace, highlighting a substantial gap between digital readiness and marketplace participation.
"This research tells a clear story: South African small businesses are ambitious, digitally-capable and ready to grow,” said Robert Koen, MD of Amazon Sub-Saharan Africa.
“What’s holding them back isn't a lack of will – it’s logistics complexity, rising costs and limited access to support. These findings reinforce what we hear from sellers every day: the hard part is not getting online; it is managing what happens after a customer clicks 'buy'.”
Among the 86% of active online sellers, 96% sell through their own websites, 67% through social media, 51% through WhatsApp and 32% sell through a major online marketplace listing. The research identifies a perception barrier: 21% of all respondents believe their business is too small to qualify – a misconception rather than a commercial reality.
The study also found that 76% of businesses maintain a physical store alongside their online sales channels, suggesting that fulfilment services could support businesses operating across both traditional and digital retail.
A further 39% cite application requirements or fees as deterrents. These findings suggest marketplace recruitment should focus not on convincing businesses to sell online for the first time, but on showing digital sellers what a marketplace adds to their existing channel mix, and how it can be a significant growth driver.
"South African SMMEs have already proven they can sell online. The question is no longer whether they are digital, but how they can grow beyond their own operational limitations," asserted Goldstuck.
"The data shows a large, commercially-active population of online sellers that are ready for the next step, but need clearer pathways, simpler on-boarding and practical support to get there."
The Amazon Digital Adoption Survey 2026 was based on 1 400 SMEs concentrated among established, urban and digitally-active businesses, with retail, e-commerce and wholesale accounting for 68% of respondents.
It covered a broad range of established local SMMEs. Retail, e-commerce and wholesale accounted for 68% of respondents, manufacturing for 26%, Gauteng and the Western Cape for 78%, and city-based businesses for 70%. Some 86% of respondents sold online.
Responses were analysed across business size, business age, owner age, ownership structure, sector and location to identify patterns in digital adoption and commercial activity.
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