Why you really need to drop ship

Let’s face it, no retailer’s marketplace will be able to compete with Amazon (or Walmart) when it comes to general assortment size. It’s also very difficult to compete in terms of shipping costs, membership perks, and delivery speed. So what other value prop can retailers who are considering opening a marketplace offer their consumers?

Should you build your own drop ship solution?

In-house solutions can incur a lot of overhead to build and maintain, meaning costs can quickly skyrocket past any potential savings. Additionally, homegrown systems often aren’t as agile as partner solutions and can soon grow out of date without large, continual investment. Finally, since such solutions are customized for the retailer that builds them, trading partners incur significant overhead to make their own systems compatible.

Accelerate drop ship ecosystem growth

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.

3 tips for reducing inventory risk

Inventory has always been one of the biggest risk factors for retail. Even the best case scenario for unsold items involves significant markdowns and/or selling to off-price retailers to recoup initial investment. Just a few quarters of sales disruptions (like some retailers are experiencing with COVID-19) can lead to bankruptcy as capital remains frozen within unsold inventory and revenue dries up. Ascena and Brooks Brothers are facing that grim reality right now.

How to build for omnichannel scale

Without robust omnichannel programs, retailers have less assortment, sell less of their inventory, and offer much less customer choice. All of which translates into lower growth and revenue. And yet building a scalable omnichannel program is a labyrinth of financial, technical, and multi-team challenges that can quickly turn into a money-pit with little or no growth to show for it.

The Top 10 Challenges of Enterprise Drop Shipping for Brands and Suppliers

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.

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).