Best Practices For High Performance Drop Shipping Fulfillment
Drop shipping is a proven strategy utilized by many merchants. Not only does drop shipping allow them to offer more items, it can also improve their ability to get products to customers more quickly. According to one report from eCommerce Drop Shipping Standards, as many as 33 percent of retailers use drop shipping to improve their operations, with some retail giants such as Amazon selling approximately $14.2 billion worth of products via drop shipping. Retailers planning to capitalize on drop shipping should take note of some of these best practices.
1. Find the best drop shipping partners
Picking the right distributor or manufacturer can have a big impact on drop shipping implementation. It does not matter whether retailers implement the best order management solutions or if service providers have huge product selections – if drop shipping partners cannot fulfill orders quickly and accurately, retailers will have their hands full with angry customers.
Using drop shippers inherently lowers profit margins, as merchants must pay their partners a cut of the sale. If drop shipping service providers cannot conduct themselves effectively, retailers run the risk of impacting the bottom line. Inaccurate orders or long delays make the seller look unprofessional, and complicated returns processes going through drop shippers may negatively impact customer relationships.
Retailers must understand their own requirements and needs, as well as the capabilities of their partners. It is important to remember that not all drop shippers are alike – one manufacturer may be willing to become a drop shipper if it gets the company a contract with a retailer, another may specialize in high or low-volume operations. As Retail TouchPoints suggests, there are numerous factors that merchants must consider before selecting a drop shipper. Shopify was also quick to point out that there are a lot of scammers out there as well, so merchants need to do their research carefully or they may end up with an ineffective drop shipping partner.
2. Integrate the right solutions
Managing multiple drop shipping partners is a complex task, and up until recently was a mostly manual process. Getting orders to service providers needed to be handled meticulously to avoid errors and ensure accuracy. Retail TouchPoints puts it perfectly, asserting that emailing purchase orders to drop shippers just does not cut it for any business that wants to operate efficiently.
Modern retail solutions speed up many of the time-consuming processes merchants have dealt with in the past. With the right software, merchants can quickly and efficiently streamline communications with vendors, allowing them to place, track, manage and record purchase orders sent to vendors. Retailers can also use these solutions to set rules to generate purchase orders automatically and send orders to the correct drop shipper each and every time.
3. Ensure the customer is being served adequately
Consistency across the customer experience is already an issue that many merchants encounter, particularly as they look to foster omnichannel shopping experiences. Mishaps such as mismatched prices or wrong item descriptions can have a big impact on customers’ perception of retailers.
When retailers bring drop shippers into the mix, they run the risk of inconsistency issues, such as patrons receiving wrong items. If merchants do not vet vendors carefully, issues can be even worse. Shoppers may not receive items at all. Retailers may also wind up using different drop shippers to fulfill the same orders, so a customer who orders four items may receive (and be charged) for shipping on four orders.
While Practical eCommerce noted that larger retailers may be able to flex their muscles and get drop shippers to comply with their needs, this will not be the case for smaller merchants. Merchants not only need to oversee drop shipping partners to ensure the best quality service for their customers, but also do whatever they can in their own right to deliver the best customer service. That means tackling any issues head-on and getting answers from drop shippers that are creating problems.