Ultimate Ecommerce Website Guide

Chapter 4: How to Integrate Dropshipping Inventory

For dropship retailers who have to deal with supplier managed inventory, integrating your supplier’s dropshipping inventory feed and order fulfilment process is a critical piece of the dropship puzzle.

What is an Inventory Data Feed?

An inventory data feed is an export of the supplier’s inventory data that is provided to you typically in a file format or over API/EDI. Basically, it is how you sync your supplier data with your website, whether it’s keeping stock quantity up to date, uploading product images or automatically loading new supplier products. We go into more depth here in this article: What is an Inventory Feed?

Integrating Your Supplier Inventory Feed With Your Online Store:

Depending on whether or not you’re integrating a single supplier with your store or multiple suppliers, the evaluation and integration process can differ. Let’s start with the foundational questions when integrating a single supplier.

How many of the supplier’s products do you plan to sync with your store?

This is really the first question you should ask yourself as it will help drive your decision of what really matters from the following questions. For example, if you are only syncing a few products, certain data like categories, manufacturer’s names, descriptions, etc. are less important. However, if you plan on integrating hundreds or thousands of products the supplier’s data feed content quality becomes much more important.

What data is available in the feed?

As noted above, when dealing with a large amount of products, the data that is provided by the supplier becomes critical for many resellers. A great example is a reseller wishing to sell on Amazon, however the supplier does not provide UPC codes (which makes this very tough). Another example is an apparel store that wants to dropship a supplier’s t-shirts, but the supplier doesn’t provide categories to determine if the shirt type is  “Mens”, “Womens” or “Childrens”.

What are the common stock quantity levels? How often are they updated?

Now this is important regardless if you are syncing one product or 1,000 products. Selling an out-of-stock item can be detrimental to your online store’s reputation and can get you kicked off marketplaces like Amazon and eBay. First, you will want to get a feel for how quickly the items you are wanting to sell go out-of-stock and what the common stock level your supplier holds. If they only hold 5-10 of a popular item at a time, then you would want to be sure the supplier provides inventory updates very frequently, as in several times throughout the day. If the supplier has hundreds of an item and sells about 20 per month on average, you would probably be ok if the supplier was only able to provide a weekly update.

How reliable is the data in the feed?

If a supplier goes through the trouble of building and providing a feed, they usually put emphasis on ensuring it is accurate, however you can never be sure. At Inventory Source, we monitor the feeds daily, and if they become inactive or are reported inaccurate, we typically remove them from our directory. However, if you are searching on your own, you will simply need to do some research and keep an eye on the feed in the beginning.

Uploading your Inventory Feed

Uploading your supplier’s data feed to your online store can be done a few different ways:

  • Manual Import: Some resellers will wake up every morning and manually upload their supplier’s inventory to their store to ensure they have the most recent and accurate data. This is surprisingly more common than you would expect.
  • Writing a Script: Those that get tired of manually importing the file everyday, hire a developer or write a script (code) themselves to do this automatically everyday.
  • Dropship Automation SoftwareThose that get tired of their script breaking or do not want to hire out expensive and often unreliable custom coding, purchase dropship automation software, like Inventory Source ;).

Multi-Supplier Inventory Integration

Okay, so here is where it gets a little tricky, but not impossible. For those starting out, it is recommended to start with one supplier integration before moving onto the complexity of multi-supplier. But if you are the ambitious type, hopefully this will help get you pointed in the right direction before diving head first into the integration.

Mutli-Supplier Integration Key Elements:

  1. SKU Uniqueness
  2. Cross-Supplier Product Listings

Ensuring SKU Uniqueness Across Multiple Suppliers

The Stock Keeping Unit (SKU), still means a lot when you do not hold anything in stock. The SKU is how a single product is uniquely identified for important information such as quantity and price. Marketplaces and ecommerce software will usually use the SKU as a way to integrate and list products from a supplier. When it comes to checking inventory quantities and even sending orders for particular products, there needs to be a unique identifier to know which actual item was sold, especially in a multi-supplier environment like an online marketplace or store.

SKUs, or sometimes referred to by suppliers simply as “item numbers” or “item ids”, are implemented by the supplier to keep track of their own inventory and can be created in any random form or fashion the supplier decides. There may be best practices here, but it is rare to find a supplier that keeps SKUs by a discernable or even similar pattern to another one of your suppliers.

As an online retailer, it is your job now to ensure you have unique SKUs in your store in order to keep accurate quantities of products and send orders to the appropriate supplier when an item is purchased. At Inventory Source, we prefix all our SKUs with two letters that is unique to the supplier. For example, SKU# 1234 from supplier Honest Green would load into an online store as HG1234. This prevents another supplier from having SKU 1234 and creating confusion in the inventory sync and order fulfillment process.

Here is quick diagram of what that looks like:

Integrate Dropshipping Inventory - SKU Management

But what happens when you have two suppliers that sell the exact same product, and you want to list it as a singular product on your store while taking into account inventory from both suppliers as well as being able to order it from either dropship supplier?

Well, this is what we call:

Cross-Supplier Product Listings

You might have heard of them called Multi-Vendor Listings as well, but either way, they mean the same thing. Essentially this means that you want one product listing to be fulfilled by multiple vendors (suppliers). This adds another layer of complexity, and it is critical you put ecommerce software in place to do this kind of inventory management.

The extra “layer” is essentially the “listing”. Instead of a one-to-one relationship of a product and a product listing, the product listing could now be fulfilled by several different suppliers that all have different quantities and product costs associated. You can then add another layer of complexity and advertise that listing on multiple sales channels such as your online store, a marketplace like Amazon and an shopping channel like Google Shopping. Before your head explodes, let’s simplify it with a diagram.

Integrate Dropshipping Inventory - SKU Management

The idea of an extra product listing “SKU” (and I use the term SKU just to simplify things) is only an extra layer that is introduced when trying to sell the same product across multiple suppliers, so don’t let this deter you from selling multiple supplier’s on your store. It is only when you are attempting to sell the same product from multiple suppliers when there is added complexity and inventory management software costs.

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