Drop-Shipping

Goals

To understand how best to integrate brands that do not have dropshipping capabilities and customize the offering of such retailers in an e-commerce website, with information on after-purchase steps, stock inventory and management.


Early Findings

Branding

  • Retailers that use a dropshipping model "seldom have the opportunity to control how their brand is presented during the delivery and fulfillment process, as the supplier is the one who ships the products." However, there are some suppliers who might be willing to do it, but for a price.

Shipping

  • Shipping can be complex. If the retailer has "multiple suppliers for specific products, different suppliers will charge different shipping costs depending on factors like location, type of products, etc."
  • "If a customer orders multiple products which ship from different suppliers, the retailer will have to work out and pay the shipping costs separately. Transferring these varying shipping costs on to the customer may negatively affect conversion rates, which can impact the profit margins."
  • Dropshippers "can’t always guarantee that suppliers will deliver on time and products will meet expectations. Placing a brand's reputation into the hands of a supplier network can be a big risk. If the supplier is in charge of holding stock, it becomes very hard to control the turn around times and customer satisfaction.
  • "The most successful dropshipping companies have invested greatly in maintaining high standards from suppliers and constantly battled to ensure they commit to agreed delivery schedules."

Inventory

  • Inventory management can be complicated, since "keeping track of the stock of the supplier is nearly impossible."
  • "Miscommunications can cause issues such as cancellations and having to place orders on backorder. This aspect can, be managed with software, but those come at a price and may increase overhead and fixed costs."

Inventory Source App

  • One option for inventory is to use a Shopify Dropshipping App. Inventory Source is an app that has been gaining some traction recently, as it allows users to list their products to not only Shopify but to other marketplaces such as Amazon and eBay.
  • " It supports over 20 different ecommerce platforms, giving users more flexibility and reach with customers. It also gives users access to more than 180 pre-integrated suppliers and also allows users to add their own suppliers."
Summary
  • For the initial hour, we were able to identify some insights into dropshipping as it relates to inventory, shipping, and branding control.
  • There did not appear to be any references to brands that do not have dropshipping capabilities, however, we found that one way to integrate your own supplier would be to use a separate app, such as Inventory Source. Any dropshipping terms would depend on the individual agreements made with the supplier/brand.
  • We also found an alternate model that might be of interest, specifically 3PL fulfillment.
  • Third-party logistics (3PL) frees up time to spend on other things such as, marketing, sales, web design, and others. These companies can usually integrate with systems like Shopify and Bigcommerce. Each time an order comes in the logistics company can take over and fulfill the order.
  • Feel free to choose an option below.

Proposed next steps:

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