The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Many Bahamian and Caribbean companies are passing up potential 35-40 per cent “raw material” cost savings, a Nassau businessman has told Tribune Business, saying the biggest challenge for his new venture is “changing people’s habits”.

Robert Myers, principal and founder of Freeport distributor Vtrade Company, admitted he had “underestimated” how “set in their ways” many potential clients were when it came to supply chains and product sourcing.

As a result, Vtrade was “significantly off” his initial projections that it would be generating an annual turnover of $10-$12 million within 18-24 months, although the firm was seeing “steady growth” in its business and client base.

Disclosing that Vtrade would see a 42.9 per cent increase in its product lines, or SKUs (stockkeeping units) by October, taking these over 1,000, Mr Myers said the company was distributing product to eight different Caribbean markets.

Vtrade’s business is all about supply chain and sourcing savings that it passes on to clients, purchasing products by the trailer load in bulk - and direct from factories - from China and other Asian supply sources.

Specialising in hardware, construction materials and housewares, Mr Myers said client reaction on issues such as price and quality had been “very positive”, despite the concerns often cited about the standard of some Chinese-made goods.

“The issue is getting people to change their habits. That is something I underestimated,” he told Tribune Business.

“These retailers and wholesalers, they’ve been doing business this way for 45 years, buying from this guy in the States. The US has been the primary source of product for a long time, and we’ve got to change that habit.

“We go and present this to them, and that’s work for them. They’re thinking: ‘How do we do this?’ Some of these buyers are not the owners, so why should they do more work? Nothing’s broken, so why fix it?”

Mr Myers indicated that with Vtrade’s products, on average, priced some 35-40 per cent below US wholesale prices, Bahamian and Caribbean businesses were missing out on potentially significant cost savings.

And, with some SKUs offering savings in “the triple digits”, of around 200-300 per cent, he told Tribune Business: “It just goes to show how set people can get in their ways.

“To me, as an entrepreneur and businessman, if someone came to me and said they can lower my raw material costs by 35-40 per cent, I’d jump all over it. But often these guys making the decisions are not the owner.”

Telling Tribune Business that his sales team would be visiting Grand Cayman next week, where “real interest” had been shown in Vtrade’s products, Mr Myers said the addition of the US Virgin Islands and British Virgin Islands would take the number of Caribbean territories it is supplying to eight.

But, when matched against initial financial projections, he said of Vtrade: “We’re off that; significantly off that. We’re not hitting that target. But we’re seeing steady growth, which is encouraging.

“We’ve got a client base throughout the southern Caribbean and the Bahamas. We started in November last year, and it’s building slowly month by month. What we’re getting is good repeat business that’s steady. It shows the model is working.

“We’re off, but that’s normal for business. If it worked every time like it’s supposed to on paper, it would be wonderful, but it doesn’t.”

And Mr Myers told Tribune Business further: “We’re not just in the Bahamas. In fact, the greatest opportunities probable lie outside the Bahamas. But the Bahamas is a great market. There’s a lot going on here, more than in the other markets at least.

“Come October, which is right around the corner, we should break just over 1,000 SKUs. We’re around 700 right now.

“It’s a struggle, but we remain optimistic that it we can get a couple of these deals to go through, it’ll solidify our ongoing presence in Freeport.”