How do you become a successful dropship supplier?
Dropship has emerged as a highly accessible business model for both retailers and suppliers to provide products to consumers more efficiently than traditional commerce and e-commerce methods. Consumers order products through the retailer, who then purchases the product from the dropship supplier, and the dropship supplier ships the product directly to the consumer.
Able to create a business with much lower overhead than before, retailers and vendors find drop shipping to be a more profitable and direct opportunity that streamlines their business and relieves many of the pain points associated with running a typical online store.
This accessibility also creates attractive opportunities for suppliers to open up new channels of distribution and revenue, reach new customers without added marketing and SEO teams or budgets, and move inventory more consistently. So how does an established business transition to become a dropship supplier to take advantage of these opportunities?
Dropship requires preparation, planning, resourcing, and organization. Here is a quick breakdown on the considerations and steps a business or wholesaler will need to answer how to become a dropship supplier.
How to Become a Dropship Supplier
Evaluate the Profitability and Scope of Dropship
Taking in an influx of purchase orders from a number of retailers, processing the POs and shipping out smaller shipments to individual consumers following retailer’s instruction is similar to operating as a wholesaler, but different enough that it can trip up many businesses working alone. Which is why businesses will need to be prepared for the dramatic shift in operations required to become a successful dropship supplier.
In addition, it’s important to note that while the shipments may be smaller in size, the total number of shipments may outrank wholesale orders by several figures. This is why, when considering a shift to dropship, a supplier will need to evaluate the logistics of moving to a direct-to-consumer model and if they can retain a profit margin that keeps the business successful.
Becoming a dropship supplier requires:
- Dedicating employees to packaging and shipping smaller, individual shipments
- Creating digital content and catalog for retailers to list on their ecommerce sites
- Integrating the product data, order, shipment and inventory info with retailers’ system
- Internal system to handle oncoming order routing, shipping info and invoicing efficiently
- Integrating with different carriers to printing shipping labels and customers’ packaging materials
- Ability to process the returns and refund efficiently
Businesses may need to reorganize and reallocate assets and personnel before jumping headfirst into dropship business model. And this can be streamlined by creating a comprehensive business plan. Creating this plan upfront provides a roadmap to be proactive and prepared, which are two keys to remain profitable while handling the influx of new business from dropship retailers.
Find the Right Partner
Many businesses attempt to tackle dropshipping alone, which overwhelms their resources as they deal with the minute details of the dropship business. Suppliers need to find retailers to partner with, integrate the catalogue and order info with retailers’ system, have ways to keep warehouse and inventory data updated in real-time, automate order fulfillment, billing and invoice procedures, process return and refund and establish complaint policies to curb customer challenges before they arise. And each of these areas requires its own set of skills, equipment, and teams to function properly. It’s no surprise that dropship suppliers working alone become overwhelmed.
Fortunately, there are companies such as DigitBridge, specialized in provided a comprehensive e-commerce platform that offsets the burden on dropship suppliers to allow them to set-up and scale with ease. DigitBridge acts as a dedicated partner for digitally connecting suppliers with retailers, providing digital tools to automate the entire sales and order fulfillment process. This includes a single hub to handle product lsting, order download, shipping label printing, routing information, returns and refunds, tracking information upload and full warehouse management to efficiently shipping and keep inventory data updated.
DigitBridge also provides access to hundreds of channels for suppliers to find retailers to partner with. And because the access is provided through DigitBridge’s platform, dropship suppliers can utilize a single, centralized product catalog to push to all of the supported retail networks. Automate updates to the central product catalog so inventory numbers and product listing information are current and correct, and even utilize automatic invoicing and account receivable functions to free up supplier resources to focus on primary business operations.
Rather than trying to tackle this venture alone, team up with a partner that simplifies the dropshipping process and provides superior access to your inventory, keeping the focus trained on your business’s success. Team up with DigitBridge today, and build out your capabilities as a dropship supplier with a singular, comprehensive service to support your business.