If I scroll through my emails and social media messages, I can almost guarantee that half of the messages that have come in over the last month have been a question relating to drop shipping. For a great reason too, it’s one of the best fulfilment methods in the digital age and allows for people to get started with a business right away. But can we do 100% pure dropshipping in the Caribbean?
For all of my international readers or if this is your first time checking out one of my blogs, I am currently based in Trinidad & Tobago. I can only speak 100% about T&T, but in talking to some people in the other islands, I know they have similar challenges like us here and this may resonate with you as well.
First off, let me break down what Dropshipping is since many people have been asking about what it is.
Dropshipping is a retail fulfilment method where the store doesn’t actually keep stock of any items. Instead, the business owner purchases the products as orders come in from a 3rd party, a wholesaler or manufacturer and it is delivered directly to the customer. During the course of this transaction, the business owner never sees or touches the products.
Now, if you live in the Caribbean, you will know that getting items to and from the islands usually poses a challenge or can be costly. Skybox services (freight forwarders) have been popular over recent years because that gives us a US address to have our packages sent to and the company will then bring in our packages to our respective countries.
The biggest challenge has always been that companies don’t deliver directly to the various islands and if they do, the length of time has been a problem and the costs have been very high. The skyboxes have negated all of those issues, especially since most companies globally deliver to the US.
Can We Truly Dropship?
The key to running a successful dropshipping business is to have fast, turn around times and reasonable margins. In Trinidad, not only do we have to pay shipping fees on a product but also customs fees + VAT + 7% online tax (varies on business) and then you need your profit markup.
All of this must be factored into your prices and this is why customers cannot look at a price online and fully compare it to what people charge for it locally. Granted people with physical stores may charge more because they need to make more profit to cover overheads but this is where dropshipping can slide in.
The point of dropshipping, on the whole, is to never see the product as a business owner. Because of our challenge with delivery, unfortunately, you will need to see those products. The freight forwarders will have the products delivered to you and then you will need to liase with a local courier, to have those products delivered to your clients.
So in essence, we cannot completely dropship in a true sense, but we can still make it work.
5 Key Benefits to Dropshipping
- Can get started right away
- Minimal startup capital needed
- Don’t need a physical location
- Can offer a wide range of products
The Dropshipping method has a wide variety of benefits. The most important part is to build a trustworthy brand, that people will feel okay with purchasing upfront and waiting for their products to be delivered.
We shop online without question because there is a trust that has been established with those providers (think Amazon). In the Caribbean, this will be your biggest challenge. Building enough trust so people will do business with you, without needing the product at the time they pay you.
You can get started on a Dropshipping business right away because you do not need to have products in stock. You can start creating content around products and let people know what you have to sell and tell them about your payment and ordering process, and you are off to the races.
In another article, I will get into some of the best practices for starting out doing dropshipping but this all about making you aware of the benefits and what dropshipping consists of.
Who Should Start A Dropshipping Business?
Anybody who is a content creator, who talks about problems & solutions, who has a brick & mortar store or someone who wants to start a side business, should really look into having a dropshipping store.
If you are creating content on things that have physical products, chances are you know some good suppliers of products and you can start taking orders from your audience or do affiliate marketing for products (another blog).
If you have a brick and mortar store, shelf space is always limited and dropshipping will allow you to expand your catalogue of goods you can offer.
If you are someone who just wants to build a side business to earn extra cash, this is a great way to do so as well. You just need to keep an eye out for products that aren’t being sold locally or maybe the local stores have it at a crazy price and you can get it cheaper, whatever the case is, look for products you know will sell and set up your online shop.
There are various methods to get paid online now in the Caribbean and you can begin taking orders online and having the products delivered to your customers, even if it means having those products get delivered to your first before you send it out.
This is actually my current business model. I totally agree with you that the biggest challenge is building customer trust. I’ve got a lot to learn on this aspect but getting there. Keep up the good work on this blog.
Thanks for this article Keron, and looking forward to Part 2. I’m definitely looking into this some more.
This is great information Keron. Is part 2 out yet?
What payment processors work best in the Caribbean?
Wipay, First Atlantic Commerce, Tilopay, NCB, Sagicor…all depends on your country.