Think of drop shipping and you might imagine a small, start-up online entrepreneur selling a relatively small range of products sourced from suppliers who handle the shipping and delivery.
But drop shipping can also be a powerful tool for larger, established retailers looking for ways to maxmise revenue, drive down cost and enhance fulfilment options.
Here we look at some of the advantages to be gained from drop shipping, and at how to seamlessly integrate it into your existing business model.
The rise and rise of drop shipping
Consumers’ love for the convenience of online shopping has seen drop shipping grow exponentially. This year, the global drop shipping market is estimated at a whopping US$434.98 billion, with the Asia Pacific region accounting for US$156.59 billion of that value, while annual growth is predicted in the range of 22% until 2034.
Over the next decade, growing middle-class wealth is expected to see Asia Pacific dominate the global drop shipping market as consumers look for ways to spend their disposable incomes, with overall market value expected to rise to US$939.50 billion.
Understanding the benefits
Given these numbers, it makes sense for established retailers to consider ways to get a slice of the drop shipping market pie. And, as well as revenue growth, drop shipping can offer a range of benefits to recognised brands.
For a start, by sourcing and shipping products directly from the supplier as and when customers want them, you avoid the overheads that come with warehousing and the costs of potential spoilage. This is especially true for retailers, such as furniture and homeware vendors, that sell large items requiring ample storage.
Not having to warehouse stock also allows you to offer a wider range of products, and you get to trial new product lines without having to buy large volumes up-front, thereby lowering the risk of being left with unsold stock.
Using drop shipping also gives you an added fulfilment option when it comes to meeting your customers’ desire for fast, efficient delivery.
What’s more, established brands with an existing online offering and customer base can avoid some of the pitfalls that come with setting up a drop shipping business by leveraging existing suppliers, sales channels and customer support.
Managing the risks
Like all aspects of retail, drop shipping is not without risks that need to be managed for brand protection. Suppliers need to be carefully vetted to ensure shipping costs and estimates are reliable and accurate, legal obligations are met and product quality is maintained.
At the other end of the supply chain, customers need to receive the same level of care and support as if they had bought from your warehoused stock, so that the buying experience is seamless. That means giving your people up-to-date information about drop ship orders and empowering them to quickly address any issues.
Choosing the right partner
Making the move to drop shipping as seamlessly as possible, for both you and your customers, means choosing a technology partner who can help you integrate it into your existing business model in a way that lets you easily track drop shipped orders and inventory.
That’s where Infinity comes in.
With Infinity, you can easily create a new stock item that is added to your inventory but flagged as a drop ship product for order fulfilment.
You can then search for and retrieve drop ship orders and monitor their progress to delivery just as you would with a conventional order.
And if the customer changes their mind and wants to return or refund the item, Infinity can bring the product into your inventory so it can be receipted, counted and returned to the supplier.
When it comes to drop shipping, Infinity gives you the flexibility to expand your offering and manage orders without the cost of end-to-end inventory management. You get to choose what’s best for customers and most profitable for you.
Drop shipping in practice
When one of Australasia’s best-known furniture retailers was looking for a way to expand the range of items on offer from existing suppliers without increasing warehouse capacity, they turned to Infinity to handle drop shipped inventory and orders.
The process is streamlined and easy.
When a customer goes to the online store and identifies a drop ship product they want to buy, a new stock item is instantly created on the fly via an Infinity API that connects the web store to the supplier’s system.
The item becomes part of an order that is tracked through to completion, as well as being assigned to a physical store based on the customer’s delivery address and post code.
If any issues arise, the customer can go instore and know that their query will be handled, up to and including order cancellation, while store staff can retrieve and view the order just like any other.
The result? An expanded product offering and seamless customer experience.
Want help to get the most out of drop shipping?
If you’re looking for help to meet the demands of today’s and tomorrow's delivery conscious shoppers, get in touch. We’d love to help you deliver the shopping experiences customers expect.
