How to use drop ship suppliers in your online business

Drop ship suppliers provide an easy way for retailers to quickly expand their product range or to supply products that require specialist fulfilment and delivery. However they can be challenging to manage because each drop ship supplier organisation is unique and has its own way of doing things. This can create challenges in how a retailer can ensure the consistent delivery of their brand and to provide a consistent level of customer service. Here are four tips to simplify drop ship supplier management:

Be aware of the differences in technology and processes

Drop shippers come in variety of shapes,  sizes and sophistication and can range from high volume automated operations to those that are literally one man operating out of a shed in the backyard. Therefore how information about orders and stock is shared between retailer and drop shipper could vary by being and automated interface at one end of the spectrum to a simple file upload or even email at the other.

In order to effectively manage the different types of organisations, the retailer will need to provide a range of options for drop shippers to link their systems and processes into that of the retailers. As an example, Amazon provides an internet portal for both suppliers and their suppliers to use to process orders but also provide systemic interfaces for high volume shippers. So there is not one size fits all for this.

Consistent visibility of the milestones in the customer journey

Throughout the customer delivery journey, there are 4 key pieces of information that a drop shipper needs to provide in order to provide visibility and enable the retailer to maintain control of the process, including:

  • Order acknowledgement: confirmation that the order is received and can be fulfilled
  • Order status update: advice or notification of the stage at which an order has reached or if there has been an exception or cannot be fulfilled
  • Order despatch: confirmation that the order has been fulfilled and shipped. This message should include the carrier and the tracking number
  • Order delivery: confirmation that the order has been delivered to the customer.

Sophisticated drop shippers may operate more like another fulfilment point for the retailer and so will have even more points at which they swap information with the retailer, for example notification of stock reservation and stock allocation

And finally depending on how it is agreed that returns are handled, the drop ship supplier may also provide updates including returns receipt.

Single source of the truth for order information

The biggest challenge is to provide a means to provide one repository for all information about all drop ship orders. Nothing frustrates customer services (and customers) more than having to check multiple systems or to hang on the phone to supplier to answer calls about WISMOs or queries about returns or order amendments. Make sure that there is a central repository or system in place to view and monitor order status both for answering customer queries but also to manage payments to suppliers.

Clear SLAs and performance measures for DSS

Set and agree clear guidelines of expected performance for drop ship suppliers that they are to adhere to. This will help you to provide customers with an accurate expectation regarding shipping and delivery.

KPIs that measure: speed of order acknowledgement, number of failed orders, pick fails, on time despatch and on time delivery can identify issues with the drop shipper.

Where the drop ship supplier will be part of a long term strategy consider working with them to improve overall performance, if they are failing in some way.

Do you use drop ship suppliers in your business? What tools do you use to maintain consistency of process and services across the different suppliers? We would love to hear from you.


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About 

Hi, I am the Founder and Editor-In-Chief of eCommPoint.com.
I launched eCommPoint.com to share the fruits of my experience designing order management, fulfilment, home delivery and customer service systems and processes for ecommerce retailers.

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