A Cuban identified as Ale posted a video on TikTok this Monday in which he explains in detail how his business of buying and selling merchandise on the island works, how much he earns, and what strategy he applies to stay afloat in a market with skyrocketing prices and fierce competition.
The model described is simple: buy merchandise in Havana and resell it in their city of residence, achieving a margin of around 30% over the cost of the purchased items.
"The businesses I have here in Cuba provide for me. It doesn't make me rich, but it does allow me to eat, to maintain my house, to take care of my family, and to live a little above the rest," he states in the video.
Ale warns that the margins are tight because prices on the island are "superinflated" and the difference between the cost price and the selling price is very small.
However, he points out that the relationship between investment and profit is directly proportional: "If you invest little, then you reap little," he summarizes.
For those looking to replicate their model, it is estimated that an initial capital of between 3,000 and 4,000 dollars is needed: "With three thousand or four thousand dollars, you can manage to start a small business like mine."
One of the biggest challenges he faces, as he explains, is the competition in the food sector, where some sellers lower their prices so much that they force others to do the same, eroding everyone's profits.
"Since the competition is so fierce here in Cuba, many people come with a lot of money and significantly lower the prices of their goods. And what happens with this? It forces other businesses to lower their prices as well," he points out.
In response to that dynamic, Ale chose a different strategy: to maintain "acceptable and affordable" prices and to open more points of sale in the city instead of competing by lowering prices.
"I changed my strategy and what I started to do was open more locations with the same prices. This way, I sell a little at each location and don’t have to lower the prices of the merchandise so much," she explains.
Ale's testimony comes amid the most severe economic crisis Cuba has faced in decades, with independent estimates placing inflation above 220%, the dollar trading at 680 pesos on the informal market, and blackouts lasting up to 20 hours a day impacting small businesses as well.
In this context, the private sector leads retail in Cuba with 55% of the sales recorded in 2024, and models like Ale's —purchasing in the capital and reselling inland— have become one of the most widespread among self-employed individuals.
In June of last year, the Cuban government approved reforms that allow individuals to import goods for commercial purposes and remove the limit of 100 employees for private companies, measures that partially legalize practices that already existed informally, such as the one described by this entrepreneur.
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