OrderWise in July 2021 - v21.7
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Direct drop-shipping is where the retailer asks their suppliers or wholesalers to package and deliver orders directly to customers on their behalf. Items are sold through the retailer’s sales channels, but the retailer doesn’t have to involve themselves in the shipping logistics. As a result, they can save on precious time, handling and costs, and get orders to the end-user much faster than ever before.
It’s a concept already prized by many larger retailers, such as Wayfair, Dunelm, Very and Next. Usually, the drop-shipper will be invisible to the end-consumer, merely stocking and shipping the products. Sometimes, however, as with manufacturers, their brand will be present on the product itself, under the retailer’s outer packaging.
As ever, the retailer stays in charge of the online marketing, selling and customer service for this product when purchased through the retailer’s online store. A close relationship with the supplier is, therefore, essential to ensure smooth communication and fulfilment of orders.
Though we’re seeing a rise in demand for more sustainable products, this doesn’t mean that changeable trends have diminished. Consumers want more choice, smoother service and faster delivery. Direct drop-shipping can help with all these requirements.
The main benefit comes from the ability to boost retailers’ fulfilment capacity. Retailers can process more orders with less legwork. Vitally, the retailer can achieve this without increasing their handling and storage of stock in-house. So, there’s no need to grow the size of warehouses and associated costs. By cutting out the middle-logistics, the retailer also cuts out any extra processing and repackaging in-house. The result is faster delivery that’s also more environmentally and economically friendly.
For the front-facing side of your business, you can fulfil the growing consumer demand for faster delivery. Direct drop-shipping can even allow same-day delivery. Some suppliers and wholesalers enable stock to packed and ready to ship directly in just a few hours.
Online, your offering capacities are vastly extended, with a much larger range of direct drop-shipped goods available. Products often impractical to stock in-house can be held by the manufacturers and wholesalers. Usually, they are better equipped to store their own products and parts. Across the board, this will streamline supply operations for the business, the environment and the consumer.
With such a rise in short-term trends, direct drop-shipping enables the flexibility in supply chains that’s essential to many retailers. If you’re unable to handle or store certain goods on-site, your suppliers’ expertise can fill the gaps in your capabilities. Whether providing specialised installations of products or the personalisation of items, your suppliers and wholesalers can make all the difference for you and your customers. It’s this kind of benefit that gives your operation the edge over your competitors.
The customer journey is a crucial part of your retail business. Giving up your control of any part of it, especially one so important as fulfilling and despatching orders, can be difficult to imagine. But, you can ease these fears with the right technology and relationships with your suppliers. The supplier will need real-time access to your orders coming in. You, the retailer, will need instant stock availability updates.
Having an ERP system with Order Management software that allows for supplier integrations and Electronic Data Interchange (EDI) can help to provide the much-needed visibility for off-site operations, so your business isn’t trading blind. Alongside the purchase orders shipped from your own warehouses with WMS, any orders with drop-shipped products flag with details of the supplier. You can even include progress updates to help your communication with customers. By integrating your software with your suppliers and using EDI, you facilitate an automated live transfer of data. Here, you can automate much of the processing from the retailer to the supplier, from incoming orders and special packaging requests to despatching items with the most suitable couriers.
Courier integrations can also help to simplify your shipping logistics. For the big retailers, by sending through a printable shipping label to the drop-shipper, which can be smoothly interpreted by the couriers’ systems, they eliminate errors stemming from rekeying details off-site. But, many retailers can expect their drop-shippers to handle this integration, all as part of the direct drop-shipping service. With this integration, you can start to produce live shipping updates for better customer service updates and for your own fulfilment data analytics.
With software aiding your operations, direct drop-shipping could be an excellent way for your retail business to grow, or evolve your brand in-line with your customer demand, without many of the extra costs and logistics ordinarily involved.
Moreover, if your business itself is looking to direct drop-ship for some of the big names, OrderWise has integrations for the likes of Wayfair, eBay, Amazon, High Street retailers and more. So, with all your operations covered, you can look to expand your business with confidence and flexibility, future-proofing your operations as you evolve.
For more information on how to implement the right software for your drop-shipping requirements, contact the OrderWise team today. You can also visit our website to see what OrderWise can achieve for your business. In the meantime, follow OrderWise on socials to keep up to date with all our latest blogs and news!
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