A full order book is reassuring until you look at what it’ll cost to fulfil it. Stock needs paying for, delivery charges add up, and the discount that persuaded a customer to buy might leave you earning very little. For a small business, December can be busy enough to feel successful while leaving too little money for January.
GoTyme Bank’s outlook for the final quarter of 2026 looks at that problem. Miguel da Silva, group executive at GoTyme for Business, expects Black Friday and festive shopping to bring opportunities for South African SMEs. His advice is to pay closer attention to what those sales leave in the business, particularly when costs are rising.
We’re still spending, despite the weak economy. Retail sales increased by 3.4% year on year in July, while GDP fell by 0.2% in the second quarter. Those figures measure different things, over different periods. Neither tells an individual shop owner whether their festive sales will cover the cost of doing business.
Da Silva also warns about the possibility of higher fuel costs. Businesses could pay more to receive stock and deliver orders, while customers have less available after paying for transport. Passing those increases on isn’t easy when people are comparing prices and deciding what they can afford to leave out.
A discount can be more expensive than it looks
If you run a small shop, sitting out Black Friday can feel risky. Customers expect offers, and larger competitors may be advertising prices you’d struggle to match. But matching them without checking your own costs can leave you selling considerably more for the same amount of money.
Consider a product that sells for R500 and costs R350 to buy. You have R150 left before other expenses. Reduce the selling price by 20%, to R400, and that drops to R50. The discount has removed two-thirds of your gross profit on the item.
You’d need to sell three at the discounted price to earn the same gross profit as one at full price, assuming the purchase cost stays unchanged. That also means fulfilling three orders, with whatever additional expense each involves. The offer may look modest to the customer and be difficult for the business to afford.
There are good reasons to discount. Stock that’s been sitting on a shelf has money tied up in it, and selling it for less may be preferable to keeping it indefinitely. An introductory offer might also persuade someone to try a business they haven’t bought from before. Da Silva recommends choosing promotions more selectively rather than reducing everything.
The calculation needs to include the costs beyond buying the product. If you’re covering delivery, paying transaction fees or bringing in extra staff, the amount left after the sale will be smaller again. A competitor’s advertised price won’t tell you whether you can afford to charge the same.
When the money arrives
Businesses often have to spend before festive sales begin. For those that invoice customers, the wait for payment can continue after the work is finished. Having the money due to you doesn’t help much when a supplier needs paying today.
GoTyme uses its outlook to promote faster, cheaper payments. Its instant-payment service allows transfers of up to R50,000, with no charge up to R5,000 and a flat R7 fee above that amount. Standard, non-instant transfers are free, with a limit of R500,000. Customers access these services through the GoTyme app following the switch from the old TymeBank app.
Lower fees can help, although an outgoing instant payment doesn’t make an overdue customer pay any sooner. Businesses accepting card payments also need to check when their payment provider makes those funds available. The bank transfer service and the merchant’s settlement arrangements aren’t interchangeable.
Da Silva recommends prompt invoicing and following up on outstanding payments. That’s work owners may find difficult to keep up with during a rush, but leaving it until things quieten down can extend the period in which they’re funding the customer’s purchase.
For online shops, there’s also value in testing the purchase process before the offers go live. Try ordering on a phone. Check when the delivery charge appears and whether a completed payment produces a clear confirmation. If something goes wrong, customers need to be able to contact someone who can resolve it.
Staff handling orders should also know how to check that payment has reached the account. GoTyme cautions against relying on payment screenshots. A customer asking for urgent dispatch still needs to go through the same checks as everyone else.
Include January in the budget
Da Silva recommends forecasting cash flow through the end of January rather than stopping at 31 December. That means accounting for bills still due after festive trading, as well as refunds and a possible slowdown in sales.
It gives owners a better basis for deciding how much stock to buy and which promotions they can afford. Money received in December may already be needed for a supplier payment in January. Spending it on another order of stock could leave the business short when that bill arrives.
Some businesses will still decide that a lower margin is worthwhile to move stock or attract customers. But that decision should come from their own costs and payment dates. There’s little comfort in having sold more than last year if the money needed to keep trading has already gone.