Using our featured “dropshippers” solution you now have the ability to increase your online exposure and online sales revenue. Slypod has many features built in including proprietary brand monitoring software to give you the added bonus of knowing what your clients are saying about your products online.
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Best Practices in Drop-shipping
Drop-shipping enables you to leverage a third party’s inventory to sell goods without the costs and associated risks of warehousing and fulfillment. In the past, drop-shipping was riddled with manual processes. There were no simple and timely methods for retailers to maintain control and visibility over drop-ship orders.
Today, automation is a must-have for a successful drop-ship model. Whether you develop automated technology in-house, purchase third-party software, or subscribe to software from an ASP, retailers must be linked to their drop-ship vendors electronically.
Regardless of the automated system you select, it must have flexible options to accommodate all levels of vendor sophistication – from low tech to high tech. It should also manage the lion share of order communication and processes throughout the entire life cycle of an order.
In other words, you should only be managing exceptions. Transactions such as order transmission, order acknowledgements, shipment notifications, invoicing, returns processing, order changes, customer service requests, product master updates and delinquent vendor notifications should all be automated.
Staffing and vendor relations
Because automation eliminates the manual processes traditionally associated with drop-shipping, you don’t need much staff to manage drop-ship operations.
But you must establish ownership of vendor sales relationships, overall performance, and day-to-day execution. This includes vendor relationships with merchandising, purchasing, operations and customer service.
Your vendors can’t represent your brand if they are not a true extension of your company. It’s important to cultivate retailer/vendor relationships throughout both organizations that foster a collaborative partnership to successfully serve the end customer.
Building relationships requires you to understand your drop-ship vendor’s capabilities. Is the company equipped from a facilities and systems standpoint to ship direct to your customers? Does it have automated systems to receive orders electronically? This eliminates lag time for order processing and minimizes human error associated with rekeying an order.
Is the vendor sufficiently staffed to handle your peak order periods? If a supplier is providing drop-ship services to other retailers, check its references. Ultimately, your goal is to determine if a vendor is capable of servicing your customers based on your own fulfillment standards.
Business rules and compliance guidelines
Paramount to a collaborative retailer/vendor partnership is laying a sound foundation that defines business rules, values, and customer service metrics, and clearly communicating these to your vendors.
Remember that vendors are not mind readers. In order to function as an extension of your company, they need business rules to operate by. Your drop-ship success depends on it.
Tell your vendors your expected order turnaround time and fill rate percentage. Identify the shipping carriers to be used and a method to provide shipment updates and identify any special packaging requirements.
Establish a method for maintaining inventory visibility to avoid backorder situations. Set timeframes for responding to customer service issues. Identify product costing procedures and methodologies for handing returns and canceled orders.
Ultimately, the best practice for drop-shipping is to provide your vendors with formal compliance guidelines governing the relationship specific to fulfilling drop-ship orders. They should be feasible and reasonable–not utopian, and provide your vendors with everything they need to know to meet your standards.
Guidelines should help not hinder your vendors. When executed properly, compliance guidelines bring efficiencies and cost savings to business operations; they act as a baseline for vendor scorecards; they help you drop-ship more aggressively and confidently, and improve customer satisfaction and profit for you and your vendors. Compliance guidelines should include your company history, vision, and expectations for customers, service standards and key compliance areas, systems used for communications, accounting and paperwork requirements, routing guides and ship method requirements, returns instructions, reporting and chargebacks for noncompliance, and contact information for merchandising, purchasing, customer service, accounting, and IT.
Execute your compliance guidelines at the start of a new vendor relationship, and include a formal sign-off in your contract that guidelines have been acknowledged and agreed to.
Monitoring the performance of your vendors and taking corrective action before problems escalate is key. It’s just as important to acknowledge good performance. Be sure to communicate your performance expectations to your vendors.
Develop a scorecard for rating your vendor’s performance. Set timeframes for scoring your vendors and tell your vendors the results. Give timeframes for vendors to correct problems, and work with your vendors to help them (and you) succeed.
Ask yourself if there is something you can do to correct a problem. Sometimes it is as simple as identifying your vendor’s limitations and making adjustments.
For problem vendors, evaluate if the relationship with the vendor is short or long term–are they more trouble than they are worth, are their products unique, or can they be replaced by comparable products from a more capable vendor?
Best practices in drop-shipping leads to higher service levels and profitability. Following simple rules can help your drop-ship business excel. It¹s a win for you, a win for your vendors, and ultimately, a win for your customers.
Online Drop Shipping – How to Start
Want to start your own online drop shipping business but don’t know where to start? You’re in luck! Drop shipping is a low-cost, highly profitable business model that can help you earn the kind of money you deserve. It offers the flexibility of small start-up costs with the potential for unlimited income. This makes it a great option for individuals who want to start a business but don’t want all the risks that come with it. However, as you may know, drop shipping isn’t as simple as it sounds. Its popularity has made it a prime target for scammers and middlemen.
To be successful in drop shipping you need a quality and reliable product source. Your wholesale supplier is your business partner and without a good one you will fail. This is the step where most people fail. New drop shippers tend to go to the search engine and sign up for the first drop shipper they find. These guys are almost always middlemen that mark up the wholesale prices and charge monthly fees. The net is saturated with these guys. The only one who makes money with this relationship is the middleman.
However, finding a good product source isn’t the only thing involved. You also need a strong business plan if you want to do well. You have to plan ahead. Don’t think you can just list products on eBay and the cash will start rolling in. It’s not going to happen. You need to differentiate yourself from your competitors, know who your customers are, and know how you’re going to get your products in front of them. Just being online isn’t enough to make sales.
Most people head straight to eBay once they’ve found their wholesale source. It’s a highly trafficked site, so it makes sense that you’d go there to sell. The problem is that eBay is extremely competitive and charges tons of fees to sell products. This means you’ll have to lower your price to beat your competitors and you’ll also lose money from all the fees. This greatly reduces your profit margins, as you would guess. Not only that, but you’re eventually going to run into an out of stock issue. This occurs when you sell a product, then go to your drop shipper to find out it’s sold out. This means you have nothing to ship, and an angry customer. This will lead to negative feedback and possible banning from eBay.
Obviously, drop shipping is not the simplest business in the world, but don’t give up. You can make a lot of money in this business if you do your research and plan ahead. Drop shipping is one of the greatest online business opportunities out there. Like anything, persistence is key. Keep expanding, improving, and focusing on customers, and you will eventually make it.
Drop Shipping Using E Shops – How it works.
Clients offer products from a supplier on their e-shops. The customer who buys the product on the e-shop pays supplier and the online store user gets a commission from that sale.
A prerequisite for a drop-shipping is to establish cooperation with a supplier. When an e-shop is connected to it, it automatically retrieves all data about products from the online store – the name of a product, code, price, annotation, descriptions, parameters, images etc.
The supplier also supports all its partner e-shops when it comes to complete the service for their clients. This way the supplier contributes to his/her own success, because this further leads to an increase in the supplier´s turn over. The supplier can, for example, help answer questions from the prospects and customers,
The supplier ensures the execution of orders and product delivery
The supplier takes care of the execution of orders received in the drop-shipping partner e-shops including the correct shipping and delivery of products.
The supplier guarantees the products and resolves any potential complaints
The supplier, also guarantees the quality of products and resolves any potential product complaints.
E-shop gets a commission from the supplier for the realized sales
The profit of an online store which does business through drop-shipping consists of the commissions paid by the supplier from sales to customers who purchase in the particular e-shops.
Drop-shipping: E-shop can be provided by anybody
Anyone can easily run an e-shop through drop-shipping. To effectively run and e-shop one does not need any traditional, physical shops, warehouses, or complex information systems. You will not need to have a large staff to deal with the business. Most of the obligations of an internet provider are fulfilled by their supplier. Anyone who is interested in this way of doing business simply has to run an online store and properly optimize it for the search engines in order to be well positioned on the internet. Online Business Solutions