Expanding your drop ship ecosystem can take a lot of time. Getting trading partners to agree to drop ship, onboarding them, and finally going live can take anywhere from several months to over a year per partner. This raises opportunity costs, hampers your ability to quickly expand assortment, and increases inventory risk when you’re forced to rely on wholesale buys to access the products you need.
Drop shipping is not just another distribution method but an entirely different way of doing business that involves the integration of suppliers and retailers into many of the supply chain roles that are typically kept separate in wholesale. Despite its many advantages, therefore, drop shipping also has a lot of unique and complex challenges that must be navigated correctly in order to function at peak efficiency.
Every manufacturing, warehousing, and logistics decision should be made with the goal of strengthening your other wholesale and direct-to-consumer sales channels, and vice versa.
Check Out Our Guest Post on Shippo’s blog: Five Most Important Metrics for Monitoring Supply Partner Performance
Read the full post here.
In the coming year we’ll be adding some cool data features to the Dsco platform that will allow trading partners to not only access such data but perform just these types of correlations with their own data in real time to tackle issues such as excessive upgrades, late shipments, and cancellations.
Super Bowl assortments, filled with apparel, home goods, and jewelry merchandise, are usually drop shipped because of inventory availability and other supply chain considerations. Unfortunately, a small number of retailers are dropping the drop ship ball by including products featuring the likenesses of players no longer on rosters of the Super Bowl teams. In one example, a major retailer is featuring a wall decal of a former player that has not been on the roster since 2012!
The Power of Supply for Digital Marketing, Part One – Four Supply Woes that are Digital Acquisition Killers
If your performance marketing team isn’t pushing you for intelligent assortment and significant visibility to inventory, they are missing out on a step-change in their ability to allocate budget. Better quality differentiated assortments along with rich item data not only improve conversion rates but also have excellent value for building first-bid predictive models (more on that at a future date).
The Power of Supply for Digital Marketing, Part Two – Four Steps of Inventory Visibility to Lift EBITDA and GMV
This concept doesn’t just apply for seasonal offerings, it works for any product where demand is high and restock may have some latency. Where this is happening, having good supply partners who are 1) telling you restock timelines systematically and 2) are willing to drop ship from factories to bypass the full truck route, will make these sellout momentum playbooks smarter.
As usual the sessions and panels were also top notch, with speakers from Target, Amazon, REI, and JD.com to name a few. In the coming weeks we’ll be writing a few in-depth blog posts based on some of the topics that were discussed. In the meantime, here’s an overview of important takeaways from the panels and speeches attended.
From all of the presentations and panels that I attended, it’s clear that retailers are going all in with using their store fleets to fulfill online orders.
This is a really interesting strategic move considering that, as noted above, stores have the lowest accuracy of any inventory asset in retail. It therefore highlights the difficult choice that retailers face.
If order volume grows at 20% per year, a retailer will have to invest in doubling its fulfillment capacity every five years. This is what we’re seeing with Amazon but it’s not something anyone in the supply chain would look forward to doing. Building new FCs is expensive, time consuming, and risky.