Retail Analysis
Choose trusted partners Before getting into any partnership with dropship vendors, do your research. It can be challenging to get recommendations for dropship vendors, as many will be used by competitors. However, starting conversations as early as possible will give you the time to ensure that they are a vendor who will deliver. If you can, start small to make sure they can handle your orders. It’s also vital to test the products your dropshipper provides, and
ensure that they are of the high standard you would demand of your own stock. Learn how your vendor handles returns and damaged products. How is their customer support? How long does it take them to fulfil an order?
Work with your Order Management Systems One obstacle in the way of dropshipping can be Order Management Systems (OMS). Many can’t keep up the pace for dropshipping as they’re not flexible enough to handle company owned and third party stock. Thus, if you plan to use dropshipping to extend your business, ensure that your ecommerce platform or OMS is designed to cater for such a business model. One approach is to use a MACH (Microservices-based, API-
first, Cloud-native and Headless) architecture, enabling retailers to respond to market changes quickly and meet changing customer needs.
Consider high cost items Some products - such as fragile or valuable items that might need additional security - cost more to stock and ship than others. Unless your entire company specialises in these types of products, it doesn’t make sense to pay additional storage and shipping fees for a small subsection of your business. However, you can still keep your customers happy by offering these products through dropshipping.
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The risk of overselling Market fluctuations aren’t always predictable. Having a dropshipping supplier as a backup allows you to avoid raising inventory costs by overstocking to meet unlikely maximums. You can cut costs by stocking up on only the inventory you know will sell, and if an unexpected demand for sales comes in, you can satisfy them with dropshipping. It’s a great safeguard against the uncertainties all retailers face. It
also provides an insurance option for extreme circumstances - if something like a natural disaster happens to your warehouse, you can still fulfil orders by dropshipping the products from elsewhere.
Retail fulfilment of the future Optimising the online channel has become a top priority for retailers in a post Covid world, especially for those brands that have reduced their store count. Retailers that are able to make all their global inventory online will be the best place to boost sales and minimise margins through achieving an uplift in product availability and reduced stock outs – without having to spend more money on stock. Utilising a single platform that integrates both inventory and
order management will allow businesses to create an enhanced and engaged customer experience across multiple channels. Such platforms should be agile and flexible, in order to allow retailers to integrate innovative fulfilment options that will help to maximise profit margins whilst reducing risk. Virtual inventories and dropshipping both allow retailers to
stock a wider range of products across multiple regions, through multiple channels. They also help to reduce margins by reducing the need to overstock, or outsourcing the stocking and delivering process entirely. These advanced strategies will enable retailers to adapt quickly in line with changing market conditions and demands, allowing them to thrive and survive both on and offline.
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