If you’re from Europe or the U.S. looking to operate in Latin America, this is what you must know and understand before diving in—from the predominance of Cash On Delivery for dropshipping to localized fulfillment services.

Latin America is the next destination for global dropshippers. Compared to highly developed e-commerce markets like the U.S. and Europe, the region has been experiencing gradual changes but is now ready to become a powerful dropshipping hub. As profitable as it may be, you must know that Latin American consumers have different preferences and behaviors that set them apart. With cash on delivery (COD) as the main payment model for dropshipping, there are certain challenges you may face when trying to sell to people in Mexico, Colombia, Peru, Chile, and Brazil.

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E-commerce in Latin America and what it means for dropshipping

Let’s start by understanding that dropshipping is an e-commerce model, and in LATAM the general e-commerce market has shown a significant rise, growing 1.5 times faster than the global average. Mexico, Colombia, Peru, Chile, and Brazil are the influential leaders in the region. For instance, in Brazil, dropshipping practices are projected to reach a revenue of US$ 19,427.5 million by 2030, making it one of the most profitable nations among its peers.

In general, there are over 500 million shoppers in the zone, with niches like pet supplies being among those with the highest demand. This information is vital not only for local entrepreneurs but also for those from abroad looking for opportunities in dropshipping in Latin America.

Why is Cash on Delivery for drosphipping so popular?

As mentioned before, COD reigns in the zone. You might be asking yourself: why do consumers here prefer COD when prepaid purchases are simple and effective? The truth is, people still hold doubts when performing online transactions. Considering that internet penetration in Latin America has grown slower compared to other regions, cybersecurity concerns and lack of trust are still very present.

Simply put, COD grew in popularity not exactly because of convenience, but because it represents a solution to the lack of digital trust. With this in mind, outsider dropshippers must act with caution when planning their business and payments in Latin America.

How do dropshippers handle payments in Latin America?

Even though COD seems synonymous with dropshipping here, the truth is that Latin Americans are not unfamiliar with using cards, digital wallets, and local payment methods when buying from giants like Amazon and Mercado Libre.

The reason why cash on delivery for dropshipping works so well is that it gives people the option to verify that their product is delivered correctly and only pay when that happens. But how effective is this model for dropshippers? While it helps attract clients, your margins depend substantially on the “last mile.” If buyers are not home during delivery, or if there’s a sudden cancellation or issue with the courier, dropshippers face the risk of losing money. This makes understanding payments in Latin America a strategic pillar for your store.

Dropshipping Fulfillment in Latin America

You may be wondering how fulfillment works in a region that mainly utilizes Cash On Delivery for drosphipping. This is where alliances with local courier services (paqueterías) become relevant. Dropshipping solutions companies function by offering local suppliers with their own warehouses, meaning the entire fulfillment process is handled by the company and its partner couriers.

These partner couriers are capable of collecting payments upon delivery; however, this incurs risks related to coordination between the package reception and the dropshipper. If an undesired situation happens—such as the package not being received, the client not being home, or last-minute cancellations—the dropshipper is at a loss.

Dropshippers from other parts of the world should also consider that delivery times may depend on local infrastructure. For instance, in Colombia, there are areas with restricted vehicle access, while in Brazil, high charges may occur due to inefficient routes, returns, or cargo theft. Doing dropshipping here means understanding these differences and looking for the right business angles to counteract the risks.

A guide to doing dropshipping in Latin America from the US, and Europe

Now that we’ve covered the preferences and behaviors of users, let’s touch on the best practices to succeed from abroad.

Diversify your Payments in Latin America

Some think that because of the COD preference, your business should only follow that path. However, you must think about long-term profitability when it comes to payments in Latin America. If people are already using Mercado Libre (regional e-commerce platform) and Amazon, prepaid methods should not be discarded. The right solution for European and North American dropshippers is using a payment gateway that accepts local methods (like Oxxo in Mexico or Pix in Brazil). Wiio Payment, for example, provides this infrastructure, reducing cart abandonment due to the familiarity of these methods.

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Choose your dropshipping supplier well

Choosing your supplier well is crucial not only for finding the right product at a competitive price but also for fulfillment. Global suppliers have an advantage as they understand the taxes and logistics of different countries and have standardized processes for dealing with risks and policies. Plus, the customer support is generally designed for global dropshippers, making communication much easier.

Our platform, Wiio, is the ally you need to venture into Mexico, Peru, Chile, Brazil, and Colombia, as we successfully operate within these countries with a comprehensive product offer and after-sales services.

Choose products with real demand in your target market

What works for you in the US or Europe may not generate the same results in Latin America. For example, a “winning” home product in Spain (like a specific type of window shutter accessory) might not fit the house structure in Colombia or Brazil.

It is also essential to understand the local price dynamics. For example, in Mexico, consumers are always on the hunt for the “Bueno, Bonito y Barato” (Good, Pretty, and Cheap) deal. You must research the average prices of your competitors to ensure your offer remains competitive in each specific country.

Pro-tip: Dedicate efforts to customer service via WhatsApp. It is the leading messaging app in the region. Your customers expect a quick, human response rather than a standardized series of automated replies.

Do dropshipping in Latin America with Wiio

With us, you’ll always find the right products for your audience plus the payment infrastructure that will get you more conversions through local payment options. No matter where you are: you won’t need to establish an LLC to operate in Mexico, Colombia, Peru, Brazil & Chile.

Launch your business in LATAM with us.

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