The Importance of Automating your Drop Ship Business
Once upon a time, as recently as 7-10 years ago, there was a widely held view that drop shipping was a pedestrian form of retail fulfillment. During drop shipping’s dark ages, more than few drop ship suppliers and retailers were considered unreliable, which ultimately gave drop shipping and the small mom & pop retailers who pursued the model a bad name.
Jump ahead 10 years or so, and because of a variety of factors — including automation, demand, supplier scorecards, and advances in technology, just to name a few — drop shipping is now a widely sought after inventory and fulfillment model for many of today’s large and small retail businesses. From ecommerce-only operations and non-traditional retailers like incentive programs and reward centers, to big box operations like those run by Target and Walmart, drop shipping has gained credibility as a cost effective and scalable method of dealing with inventory and managing fulfillment.
Some of the advantages of drop shipping were laid out in an earlier blog post here on DropShippingBlog.com titled Drop Shipping For Dummies. That post, which I encourage everyone to read, also mentions the fact that drop shipping is not without its thorns.
One of the prickly patches associated with drop shipping comes from a phrase retailers passionately despise: “Out of Stock.” Suffice to say, and not that I’m trying to downplay the issue, but inventory going in and out of stock is as much a fact of life as anything else. The reality of owning a retail business — whether it’s a brick and mortar or ecommerce operation — is that suppliers serve many retailers, and as a result, sometimes find it difficult to guarantee supply. As a result, drop ship retailers are especially vulnerable / at the mercy of their suppliers. The risk of selling a product that is no longer available is a real possibility, especially if your store’s inventory is not updated with any reasonable frequency. Two things to take from this:
- It is very important to work with reputable drop ship suppliers. Doba has requirements that suppliers, manufacturers, and distributors must meet in order to continue working with our retailer members. Using our industry-leading supplier scorecards is a great way to make sure you’re working with drop ship suppliers who fit your business model.
- Staying as close as possible to inventory updates from your suppliers is critical to your success. The best way to do that is through automation.
"Son, automating your drop ship business is the best thing since sliced bread."
My grandpa would say, “Son, automating your drop ship business is the best thing since sliced bread.” In other words, if you have the ability to streamline and automate your online business, do it!
Automation of inventory levels (as they appear to shoppers and buyers) allows you as an online retailer to focus the balance of your energies on merchandising, marketing, selling, and retention efforts. It is the difference between needing to hire an employee to spend hours manually entering in orders and product feeds, or just having orders sent automatically to your suppliers. Automation can also be the difference between the embarrassment associated with selling products on your website that are no longer available, or the peace of mind the comes from knowing your products are automatically unavailable for purchase the instant they go out of stock.
For established retailers who have their own programmers or access to programmers, a division of Doba called Doba SMB offers an API (application programming interface), which can be programmed specifically to their needs, including gaining access to real-time product descriptions, images, wholesale prices, and inventory levels. The API also allows retailers to automate orders and receive shipping and tracking information as soon as it is provided by the supplier or distributor. For more information, visit Doba SMB or read Doba’s API documentation.
For smaller retailers, including those who may not need full automation but still need regular product updates, Doba’s Data Export Tool is the perfect solution. The Data Export Tool provides full product data, as well as smaller inventory only updates in a variety of formats and can be exported daily or as often as needed to ensure you have the most up-to-date product data available.
