Today’s consumers expect swift, flawless service and retailers are finding that the best way to meet those high expectations is to adopt the drop shipping model of supply (also known as supplier direct fulfillment (SDF) or vendor direct fulfillment.
For the retailer, this model hands the cost and responsibility of shipping and inventory over to the supplier. Even better, retailers can test new product categories and customer segments without incurring service, fulfillment or storage costs.
One of the few risks for retailers using the drop shipping model is that the introduction of a middleman (the supplier) adds another layer of contact in the already complex and vitally important area of customer service. To mitigate the risk retailers, diversify by using a number of drop ship suppliers to avoid being over-reliant on any one supplier.
This diversifying poses a serious challenge to supply companies and whilst not all strategies deployed by retailers can be countered, there are areas where suppliers can win. This brings us to the 3 key steps for gaining an advantage and future-proofing your business:
- Shipping performance – deliver faster than your competition and/or offer the best shipping experience. With retailers working with multiple suppliers, keeping the shipping process simple whether its outbound delivery or managing returns is essential.
- Customer service – be responsive, deliver the fastest and most professional response to customer queries. In a drop shipping relationship, the supplier has all the relevant information but the client remains the point of contact for the customer. Maintaining clear visibility of the shipment to facilitate quicker customer response is key in helping clients effectively manage customer complaints and queries.
- Cost efficiency – the margins of drop shipping can be low; remain competitive by comparing the performance of your carriers in real time to help ensure you can access the best price for your clients.
Using careful planning and smart technology, drop shipping suppliers can future proof their business effectively whilst remaining competitive. SmartConsign cloud-based shipping management software is an affordable and simple way for drop shippers to deliver a seamless service without the need for hardware installation – you simply sign up and plugin.