The Tribune

By ANNELIA NIXON

anixon@tribunemedia.net

Bahamian retailers and courier companies have voiced fears that “this is going to be a dry Christmas” after Amazon confirmed it is now offering free shipping to The Bahamas on purchases of select items over $49.

One courier firm, as well as the principals for two local clothing stores, acknowledged the competitive threat posed to Bahamian businesses by what the world’s largest online has described as a promotion with no set ending. Eddie Toote, owner of Designer Beaute’, told Tribune Business that “there’s still something about ordering online that persons can’t get away from”.

He said that said despite the Government providing tax breaks that allow him to sell clothing items “at US retail prices”, he finds customers would still rather order online. Mr Toote added that the competition is no longer the store across the street but Amazon and other online shops.

“They have a concession that qualified businesses, but everyone qualifies for it. You get these concessions and you’re able to sell your products at US retail prices here in Nassau, in The Bahamas,” he explained. “We’ve been enjoying that. That’s what we do. People come in here, see our prices are very affordable like the US.

“But you know persons. There’s still something about ordering online that persons can’t get away from. And because a lot of the courier companies that have sprung up over the years make it easier for people to receive these packages. People complain that these courier companies are expensive. However, they still use them.

“So with Amazon now offering free shipping, that will probably even cut down some of these expenses that persons receive when they go to these local couriers. So it would not only hurt retailers even more; it is likely to hurt the local couriers as well. But what can you do? What can you do locally about it?” Mr Toote asked.

“We are no longer competing with the store down the street. We were competing with the store in China, the store in the US, the store wherever. When you go on Amazon, when you go on Fashion Nova, when you go on Shein, your products coming from all over the world. They’re not coming just from the US, or they’re not coming just from China. So, that’s what we’re competing with.”

Portia Fowler, manager of Body Beautiful, said she also has some concerns regarding Amazon’s new free shipping offer. However, she is waiting to see if and how it affects sales. Ms Fowler added that there are some products they carry that Amazon does not and vice versa, while asserting that most people do not necessarily head to Amazon to purchase clothing, hinting that this gives the apparel store an advantage.

A courier company’s principal, meanwhile, said he views Amazon’s move as “unfair” to local operators unable to compete on price with its size, economies of scale and sheer volume of business. Two DHL employees confirmed to Tribune Business that Amazon is delivering to The Bahamas through itself and that the online market will cover the shipping fees.

“So it most definitely is true,” Kemar Allen, customer service advisor at DHL, told this newspaper. “Amazon is shipping with DHL. Let’s just say they remove the shipping cost. Now, that part, that’s on Amazon’s end. We just deal with the deliveries. We handle that.

“Now, with the part of it where it’s a case where you get free shipping over $49, that’s Amazon. But the thing is, they will still be paying for shipping. However, you as a customer would be getting a discount or a deal on their end.

“I can confirm that they do ship here through DHL - to Nassau, to Freeport, to Abaco,  Exuma. Yes, they do ship there. Now, I can also confirm that they also do give you the option to cover the local import fees. So the only thing that you do is either collect or have it delivered. We don’t charge you for delivery once it’s here.”

Amazon said it “leverages an extensive supply chain network to delivery packages to The Bahamas”, which includes DHL and other companies. Jacob Miller, an Amazon human resources business partner, said on the social media platform ‘X’, formerly known as Twitter: “DHL brings it in. All Customs charges are paid during checkout.”

However, the owner of a local freight forwarding service, speaking on condition of anonymity, told Tribune Business: “Here’s the thing. What a lot of people don’t know is that most couriers come on the same flight with the exception of FedEx. FedEx has their own aircraft that comes to Nassau. All of the other couriers, DHL and UPS included, come on the same plane.

“So it’s not like when you go to the airport and you could select whether I’m going to go on Spirit, I could go on JetBlue. It’s not like that. It’s just like when all of the groceries that come into the country, they come on Tropical or MSC or Betty K. They’re the three main carriers that come in. I don’t know what the word is for a tri-monopoly, but people want to know why the cost of living is so high. It’s because we don’t have a lot of options as far as shipping into the country.

“So what that’s telling me is that if I’m a courier and my goods come on the same plane as DHL, somebody’s got to be covering.. even if it’s Amazon, somebody’s going to be covering the freight from the US to here on that same plane. So if I have to pay the freight for my goods, for my clients, and DHL’s booked on the plane as well and Amazon is paying that, well, Amazon is a trillion dollar company,” they added.

“So that does create an unfair situation because my clients are going to have to pay whatever the rate is per pound because I have to pay that. And if DHL doesn’t have to pay that or, as Amazon is saying [it will pay] on behalf of DHL, it creates a very uncompetitive and unfair situation. It would almost be like someone going to the Olympics getting a 1,000-foot head start but we’re all running the same race.

“And so somebody’s got to be benefiting. That’s what comes to mind. And so, obviously the couriers are not going to like that. I don’t know that the general public will like it. I don’t know that the general public will even benefit from it. But we don’t know if Amazon... without having the details, we don’t know if Amazon is writing that cost into the product. I really don’t know.”

The courier firm principal said all the funds will end up flowing through DHL and be taken away from other couriers, especially given that a large number of goods imported into The Bahamas are sourced from Amazon. They added that with DHL not charging for delivery, that also plays a role in taking customers and revenue away from other couriers - mainly small, local ones.

“So it is going to be a huge impact almost regardless of whatever the fear is just because of the volume of Amazon that’s coming into the country. Because of the sheer volume, it’s going to create a situation for all couriers who are not DHL,” they said.

“Not only that. There’s the freight component. There’s also the other service, like we charge for delivery. So DHL is not charging delivery and you are. Whatever your scale is for delivery, you lose that revenue. You lose the revenue as a broker. Because now DHL is doing the brokerage.

“So whether you were charging $25 or $100 for the brokerage, that’s gone. So it really creates an unfair advantage that honestly shouldn’t be allowed. Not if you want free competition because you’re channelling everything into a monopoly.”