How to Become a Dropship Supplier
Chapter 3: Automating Inventory and Orders
The automation of your inventory and orders for your dropship retailers can really set you apart from other supplier competition. So far on your journey of learning how to become a dropship supplier, you should have already figured out if you first have the ability to dropship products in high volumes as well as establish your shipping policies. In addition, you now should realize how important providing an easy-to-access, up-to-date and detailed inventory feed is for your retailers. Now, you have to put the two together and take into account the automation of your inventory and orders.
Accepting Dropship Orders
As a supplier of products, one of the first things you should consider is, “how do I accept orders?”. In the dropship world, this can be a challenge as you are receiving orders from a business that may expect “business type” treatment such as net terms, multiple order methods and various payment options. However, these orders are small, frequent and shipped parcel so you still have the “consumer type” potential issues such as return risk, credit card fraud and payment delinquency. Therefore, you need to be strategic about how you fulfill on your dealers ordering needs while not exposing your business to risk and operational inefficiencies.
There are a few common ways dropship suppliers accept their orders. One way is email. Whether it’s through just email body text or as a file attachment, good ole email is more common than you think. Email is great because everyone knows how to use it, can often be automated and your dealers can start sending you orders with little to no learning curve on your processes. However, email is unstructured, free form and inefficient. Allowing email orders might be great for your dealers, but often a headache for you.
Another way suppliers receive orders is through a dealer portal or essentially a B2B website. This is another great method that many of your dealers will be used to and able to pick up quickly as they probably buy online today as a consumer. There is more structure and process to website ordering allowing you to receive the order information in the way you expect it and in a piece of software in which you can manage it. However, you’ll have to remember these are your business partners and not consumers. They hopefully will be sending you dozens if not hundreds of orders per day. Because of this high volume of orders, retailers do not want to input each order they receive through those two manual processes every time. It is far too much work and takes too much time. Being that these large-scale retailers are the ones you want to keep around to maximize your profits, you should consider how you can help in automating their dropship experience.
When it comes to your high-volume retailers, they are going to want to automate the sending of their orders through either a file-based approach or an API. This is the holy grail as it can be completely automated and allows you and your retailer to easily manage orders at significant sales volume. However, this takes upfront investment and ongoing maintenance to ensure your “automation” is dialed in and your orders are being properly managed and fulfilled.
You’ll want to make sure you’ve got all four tires on the car before you put the turbo engine in it.
By using a file-based or API approach, the retailer will be able to automatically know when each order is received and shipped out. This is crucial for large-scale dropship businesses because they are taking in such a high influx of orders, and it keeps everything organized and clear to avoid miscommunication. Without shipment tracking sent automatically, retailers have to parse through emails in order to confirm an item was shipped, which does not make for an efficiently-run business.
Automating Inventory Feeds
Orders aren’t the only aspect of the dropship business that retailers want to automate – inventory management comes into play here as well. Many of these high-end retailers do not have the time to manually upload inventory feeds from their supplier to their online store every day. And even manually uploading an inventory feed every day doesn’t guarantee accurate quantity counts and prices since many other retailers are using the same feed and it’s not being automatically updated throughout the day. So, automating inventory is just as important as the automation of orders.
Now you may be thinking – okay, so how do I set up inventory and order automation? Well, as mentioned earlier in the chapter, you can do this through an API or EDI. However, unless you are willing to invest a lot of money into developing one of those approaches (especially if you’re just starting out with a dropship program) you may have to consider other options. Hiring out a developer and building an API or EDI capabilities has the potential to take a lot of time and money. Now, there are companies you can partner up with to automate all of your inventory and orders for your retailers without the upfront costs as building it out yourself. By implementing dropship automation softwareand leveraging pre-built API or EDI exchange processes, you can now offer your retailers to connect directly with you, the dropship supplier, to completely automate their inventory feeds and route their orders with little time and effort – perfect for attracting those high-volume retailers you want!
Hopefully now you realize that having an option for your retailers to automate their inventory and orders is just as important as providing an inventory feed and good product data. Since dropship automation is essential for large-scale online retailers, this is definitely something you want to have in place when starting out with your dropship program.