Not too long ago, many procurement decisions followed a familiar pattern.

If a product could be sourced overseas at a lower price, it often made commercial sense to do so. Global supply chains were relatively predictable, shipping schedules were dependable and businesses had confidence that products would arrive when they were needed.

Today, the conversation sounds a little different.

Price still matters, but it isn’t always the first question being asked.

Businesses are increasingly weighing up reliability, lead times and supply chain resilience alongside cost. In many cases, that has brought local procurement back into the conversation.

Reliability Has Become Part of the Cost

The cheapest supplier isn’t always the most affordable once delays, shortages or unexpected disruptions are taken into account.

Waiting several extra weeks for imported stock can affect production schedules, inventory levels and customer deliveries. Sometimes the additional costs created by those delays outweigh the savings made on the original purchase.

That doesn’t mean international sourcing has become the wrong choice. Far from it.

It simply means procurement teams are looking at a much broader picture than they were a few years ago.

Being Closer Brings Greater Flexibility

One of the biggest advantages of working with local suppliers isn’t necessarily shorter transport distances.

It’s the ability to respond when circumstances change.

If demand suddenly increases, specifications need to be adjusted or an urgent order becomes necessary, businesses can often work much more closely with suppliers operating in the same market. Conversations happen more quickly, site visits are easier to arrange and lead times are generally easier to manage.

That flexibility has become increasingly valuable in an environment where supply chains can change with very little warning.

Local Doesn’t Solve Every Problem

Buying locally doesn’t mean supply chain challenges suddenly disappear.

South African businesses still deal with transport delays, infrastructure constraints and the unexpected disruptions that have become part of doing business. A supplier based a few hundred kilometres away can still experience production delays or struggle to get products where they need to be.

That’s why the conversation isn’t really about choosing local over international suppliers.

It’s about understanding where local procurement makes sense and where global suppliers still offer the best solution. For many businesses, the strongest supply chains aren’t built around one approach. They’re built around having options when circumstances change.

Better Relationships Often Lead to Better Outcomes

One of the biggest advantages of working with local suppliers has very little to do with geography.

It’s the relationship that develops over time.

When businesses work together regularly, they begin to understand each other’s operations a little better. Suppliers gain a clearer picture of production cycles and demand patterns, while customers develop confidence in how their suppliers respond when plans inevitably change.

That familiarity becomes especially valuable when something unexpected happens. Conversations are often quicker, decisions can be made sooner and problems are more likely to be worked through together rather than passed from one email to the next.

Strong supplier relationships don’t remove every challenge, but they can make those challenges much easier to manage.

Value Looks Different Than It Used To

There was a time when procurement conversations were largely centred around price.

Today, they’re much broader.

Businesses still want competitive pricing, but they’re also asking how reliable a supplier has been, how quickly they respond when something changes and whether they can be counted on when the unexpected happens.

Those questions don’t always produce the cheapest answer.

They often produce the most dependable one.

That’s one of the reasons local procurement has found its way back into so many boardroom discussions. Not because it’s always the better option, but because businesses are placing greater value on certainty, flexibility and relationships than they did a few years ago.

In an environment where supply chains can change overnight, knowing who you can rely on has become just as important as knowing what something costs.

Not long ago, most deliveries followed a fairly predictable route. Products arrived at a large distribution centre, were stored until needed and then transported to stores or customers across the country.

That model still plays an important role, but changing customer expectations are reshaping the way many businesses think about warehousing.

Today, shoppers expect groceries in under an hour, online orders within a day or two and accurate delivery updates every step of the way. Meeting those expectations isn’t always about driving faster. Increasingly, it’s about storing products closer to where customers already are.

Bigger Isn’t Always Better

For years, businesses focused on building large distribution centres that could supply entire regions from a single location. Centralising inventory reduced operating costs and made stock easier to manage.

As online shopping has grown, however, a different challenge has emerged.

Sending every order from one large facility often means longer delivery distances, increased transport costs and less flexibility during busy periods.

That’s why many retailers are complementing their larger distribution centres with smaller fulfilment facilities positioned closer to urban areas.

Speed Starts Inside the Warehouse

Businesses such as Checkers have shown how customer expectations have changed. Services like Sixty60 have raised the bar for grocery deliveries, making rapid order fulfilment part of everyday retail rather than a premium offering.

Behind those deliveries is a network designed for speed. Products are stored closer to customers, picked quickly and dispatched within minutes of an order being placed.

Retailers such as Takealot and Amazon South Africa are also investing in fulfilment networks that shorten the distance between inventory and customers, helping reduce delivery times while improving service levels.

It’s Not About Replacing Large Warehouses

Smaller fulfilment centres aren’t replacing traditional distribution centres.

Instead, they’re becoming another layer within the supply chain.

Large facilities continue receiving bulk stock, managing inventory and supplying regional networks. Smaller urban facilities focus on processing customer orders quickly, allowing businesses to respond to growing demand for faster deliveries without placing unnecessary pressure on their main warehouses.

Each type of facility has a different role, but together they create a more flexible distribution network.

The Warehouse Is Getting Closer

As delivery expectations continue to evolve, businesses are rethinking where inventory should be stored rather than simply how quickly it can be transported.

For many organisations, that means bringing products closer to customers, reducing the distance between an online order and the front door. It’s a reminder that faster deliveries don’t always begin with the truck. More often, they begin with where the warehouse is located in the first place.

South Africa’s e-commerce sector is booming. The market is on track to surpass R130 billion in turnover this year. Local online sales are growing at roughly 20% and the sector handles over 100 million shipments annually. According to World Wide Worx, online shopping now represents 8% to 10% of total national retail – expanding at nearly ten times the rate of traditional brick-and-mortar stores.

But the uncomfortable truth is that while revenue is rising, profit margins are shrinking.

The problem isn’t marketing

When profits come under pressure, most merchants reach for the same playbook. They spend more on ads, push harder on sales, or negotiate lower product costs, rarely looking in the right place. The real profit drain doesn’t happen in marketing. It happens silently in fulfilment and last mile delivery. Margin loss is a death by a thousand cuts, from small, hidden inefficiencies spread across delivery networks, fuel surcharges, poor courier choices, and unexamined invoices.

If you want to protect your margins, you need to stop these seven main profit leaks.

1.      Unchecked Last-Mile Costs

Globally, last-mile delivery accounts for up to 53% of total logistics costs, and South Africa is no exception. As customer expectations around free or discounted shipping rise, unmanaged delivery fees quickly erode profit per order. Smart merchants constantly benchmark courier rates and avoid relying on a single provider.

By testing multiple options based on price, location and delivery requirements, you can protect margins without sacrificing speed and reliability. Or choose a platform that offers multiple courier partners.

2.      Unpredictable Fuel Surcharges

Fuel is one of the largest cost variables in local transport. Couriers adjust their fuel levies monthly, making shipping expenses unpredictable. If you only look at your base shipping rates without tracking fluctuating landed costs, your margins will take a hit.

Shipping platforms that provide transparent, up-to-date rates and factor fuel surcharges into the total costs give you a clearer picture of actual spending. This can help you spot the most cost-effective options.

3.      Poor Courier Allocation

No single courier performs equally across the entire country. A provider with great coverage and pricing in Cape Town might deliver poor service or higher rates in Durban or Johannesburg. Assigning orders based on rigid rules leads to higher costs and slower delivery times.

Solutions to this issue do exist, and a good place to start is by matching the courier you’re going with to your specific delivery zone based on real-time cost and success rates.

Shipping solutions can enable your business to connect with multiple courier partners. These platforms support teams in dynamically selecting the best carrier for each delivery area. This is based on current rates, coverage, and delivery performance data. The right partnership should lead to lower shipping costs while improving delivery reliability across provinces.

4.      The Cost of Failed Deliveries

Every failed delivery attempt hits your bottom line. Every return-to-origin attempt results in extra fuel, customer support time, and re-routing. Simple fixes like automated address validation and proactive delivery tracking notifications can significantly reduce these unnecessary attempts, keeping customers informed at every step.

5.      Reverse Logistics Escalation

Returns are a double penalty. Processing a return creates a second fulfilment journey, with extra transport costs, inventory hold-ups, and double handling. Track which products and locations generate the most returns. Understanding your return hotspots helps you spot delivery exceptions early and prevent items from heading back unnecessarily.

6.      Unaudited Billing Discrepancies

Small invoice errors quickly multiply when you’re moving thousands of monthly dispatches. Volumetric weight adjustments, incorrect service charges, and system mismatches are just some of the typical suspects. Without regular invoice audits and automated reconciliation, you are likely overpaying. The right tools match courier invoices against actual shipment details. This assists in identifying billing discrepancies and overcharges before they accumulate across thousands of orders.

7.      Operating in the Dark

You cannot fix what you do not measure. Most e-commerce teams closely track sales, web traffic, and conversion rates, but few have clear visibility over their true fulfilment cost per order or individual courier performance.

Real time logistics dashboards are the only way to catch operational leaks early. They provide visibility and actionable insights from one place, giving you the data you need to make smarter decisions.

Moving Beyond Cheaper Rates

Protecting your margins is not simply about demanding cheaper shipping rates. It requires a shift toward intelligent, data-driven fulfilment.

By adopting multi-courier management strategies, dynamically routing packages based on regional performance, and automated invoice auditing, South African merchants can safeguard their bottom line. In a competitive market, sustainable growth belongs to the merchants who manage their operational details as tightly as their sales funnels.

The profit leaks are there. You just need to find them. 

Written by: Angus LePine Williams, Head of Operations at Shiprazor