Dropshipping is now one of the most popular eCommerce models in the UAE because startup costs are very low, and inventory requirements are virtually nonexistent. In addition, the tech-savvy population in the region, combined with supportive policies for e-commerce and digital businesses, creates an incentive for online sellers to push their prospects. Shipping and delivery, however, are the two most difficult challenges faced by dropshipping entrepreneurs in the UAE. Customers in the UAE are accustomed to state-of-the-art service, super-fast delivery, and tracking their orders with full visibility; and failure to deliver in any of these areas can damage a brand.
This article shows the primary shipping and delivery challenges in UAE Dropshipping and some actionable ways to overcome them while also enabling customer satisfaction and growth.
1. Long Shipping Times from Overseas Suppliers
For UAE dropshippers, the major drawback is that dropshipping means long shipping times when sourced from China or the US. Many suppliers operate in distant regions, and shipping times could take anywhere from 2 to 6 weeks. This is unacceptable for consumers in the UAE, where speedy delivery and services are common (like Amazon and Noon shopping).
Solution: Work with Local and Regional Suppliers
One way to combat this situation is for dropshippers to partner with a local fulfillment center or find regional suppliers in the Middle East. Many dropshipping websites often list suppliers who deliver within the GCC. These delivery times could be reduced to 2 to 5 days, which aligns with customer expectations. Another method would be hybrid dropshipping. For example, best-selling products can be kept in warehouses based in the UAE for same-day or next-day shipping, while items that are less popular can be kept in warehouses in overseas fulfillment centers.
2. High Shipping Costs
Shipping costs in the UAE can also be substantially higher than those in other regions. Many international suppliers charge exorbitant shipping fees, which can either hurt the seller's profit margins or create products that are simply unreasonable for the consumer. Not to mention, larger or heavier items (fitness equipment, home décor, etc.) can add to the logistics fees.
Solution: Optimize Shipping Strategies
Dropshippers can mitigate this setback by negotiating better shipping rates with suppliers, especially when making bulk orders for products in high demand, or providing free shipping over a certain dollar amount in order to balance out the cost and entice customers into higher AOV (average order value). It's also better to sell products that weigh less, take up less space, and have a high profit margin, so they are cheaper and easier to ship. Including shipping costs in the price of the product helps avoid sticker shock at checkout
3. Customs Duties and Import Regulations
The UAE has stringent protocols for customs, and there may be VAT (value-added tax), customs duties, and clearance fees attached to your imported product. Customers don't like landing surprise charges upon delivery, and extra costs can lead to order cancellation or negative reviews. Certain classes of products, like electronics, beauty products, or supplements, may require approvals and may be complicated during customs clearance.
Solution: Transparency and Compliance
The best way to manage this is to be as transparent as possible about any duty or extra fee that may be required and inform them on the product page before the customer checks out. It is also in the best interests of dropshippers to be aware of which product classes may require permits or special approval before ever listing these products. If possible, look for suppliers who have experience with the UAE customs process and compliance; it can save time and hassle. For the higher-risk classes of products, using local distributors who handle and ensure compliance is a good strategy.
4. Cash on Delivery (COD) Complications
Cash on Delivery (COD) is an attractive payment method to consumers, and many consumers are not willing to pay online in advance in the UAE. Although COD creates more opportunities to make sales, it causes a lot of challenges for dropshippers. Failing deliveries, return-to-origin (RTO) orders, and additional fees on logistics can all lead to losses for dropshippers. The biggest challenge with COD is the increase in fraudulent or fake orders.
Solution: Smart COD Management
To avoid COD issues, dropshippers should look into partial prepayment systems. This means having a customer make a small online deposit to confirm their order and pay the remainder upon delivery. This will help to get rid of fake orders and provide some sort of commitment from the buyer. Dropshippers should consider working with logistics providers, such as SkyCity, that only use cash on delivery, and can have 100% cash collection and reconciliation.
5. Limited Last-Mile Delivery Options in Remote Areas
In Dubai and Abu Dhabi, delivery networks are highly efficient; however, there are challenges for last-mile delivery in rural or less developed areas of the UAE. This means that some deliveries take longer and cost more for activities outside major cities, which results in inconsistent customer experiences.
Solution: Partner with Reliable 3PL Companies
Dropshippers should look at creating partnerships with third-party logistics (3PL) suppliers that have established last-mile capabilities. Offering customers the option to pick up from collection points or lockers in malls and petrol stations can also solve last-mile challenges.
6. High Customer Expectations for Speed and Service
With established e-commerce players, UAE consumers have come to expect delivery on the same or next day. Dropshipping businesses that do not meet this expectation risk losing customers to alternative suppliers. Even if the product was unique, consumers would cancel the order after a couple of weeks if it took that long.
Solution: Set Realistic Expectations and Upsell Service
Instead of promising delivery times you cannot maintain, communicate the shipping time at checkout, and offer express options for an additional cost. You may also want to consider using influencer marketing and storytelling to communicate your product's uniqueness, which will make the buyer willing to wait. Additionally, dropshippers may want to run pre-order campaigns to emphasize exclusivity and raise expectations for longer wait times.
7. Return and Refund Challenges
Returns and refunds have a special level of complexity in dropshipping because products are shipped overseas. Beyond one of the UAE's great consumer traits, which is that returns are costly when initiated, many suppliers only accept returns when products are defective, causing further pain points to UAE consumers who expect hassle-free returns.
Solution: Clear Return Policies and Local Reverse Logistics
Dropshippers should establish clear return policies and communicate them transparently before purchase. An alternative is to work with logistics partners that provide reverse logistics solutions in the UAE to mitigate challenges related to returns. For items, particularly low-cost items, you may want to offer store credit or partial refunds instead of requiring an entire return.
8. Lack of Order Tracking Transparency
UAE customers definitely expect to be able to see detailed, real-time tracking on all orders, but many overseas suppliers do not have quality tracking and/or only provide unreliable tracking updates. Expecting tracking updates can also lead to anxiety and dissatisfaction if the tracking is merely unreliable.
Solution: Integrated Tracking Systems
Dropshippers can have details and accurate tracking updates by integrating either AfterShip or establishing a relationship with logistics partners with good tracking capabilities. SMS or WhatsApp notifications that allow customers to instantly receive notifications when the shipment has shipped, departed, arrived at the local station, and finalised delivery can avoid all queries or complaints and create trust in the brand.
9. Language and Cultural Barriers
Not all overseas suppliers know the UAE market, and it is not uncommon for them to miscommunicate meaning, Typographical specifications, and packaging or delivery instructions that cannot be misunderstood. For instance, a product misrepresented and ordered due to inaccurate product descriptions, or even worse, misrepresenting cultural sensitivities such as modesty or cultural affiliation, can incite both returns and bad reviews.
Solution: Localized Communication
Dropshippers can also validate product listings in English and the local Arabic language with culturally sensitive descriptions and images so buyers don't view the product as a juvenile send-up. It is much better working with suppliers who have either worked in or supplied from inside the UAE or GCC markets, where they can leverage locality to overcome miscommunication. Customer support offered in Arabic also creates a powerful emotional bond that can trigger trust in the buying experience.
10. Logistics Partner Reliability
Lastly, one of the most ignored difficulties is selecting the right logistics partner. Some carriers experience difficulties completing on-time delivery, handling cash on delivery (COD), or customer servicing, and those shortcomings come with late deliveries, COD shutdown, or unhappy customers that could affect the reputation of your store.
Solution: Test and Build Partnerships
Dropshippers in UAE need to have tested various logistics providers before establishing their long-term requirements. Tracking delivery speed, delivery success, and customer satisfaction. Establishing long-term relationships with reliable carriers often results in better pricing and priority service, which gives your business a better competitive edge.
