E-commerce businesses are always looking for the most effective ways to deliver their orders. Drop shipping usually comes up as a viable option because it seems to take away some of the hassle. But some of the drop shipping challenges may not be immediately evident, and when a distributor or manufacturer takes on the responsibility of delivering their products directly to the consumer, there are several factors that need to be considered.
Most Common Drop Shipping Challenges
It’s always in the best interest of any company to find ways to be more efficient. Efficiency typically leads to cost savings. However, when assessing the overall benefits of drop shipping vs. order fulfillment, you want to ask yourself, “Is drop shipping profitable for my business?” Here are the most common challenges associated with drop shipping.
Deciding between drop shipping vs. fulfillment means there is no way for vendors to know about the inventory. If vendors aren’t aware of what or how much of a specific product is in stock, they are not able to communicate accurate delivery times to customers. Also, not having control of inventory means you rarely have an accurate inventory count. Again, you can predict the difficulties that are likely to follow a lack of reliable inventory numbers.
Order Shipping Time
You are not in control of the shipping, so you cannot determine the precise shipping time. In a consumer environment that has become demanding of all aspects of customer service, including fast delivery, this can be detrimental to the customer experience.
Seasonal Product Fulfillment
This again goes back to not having control of the inventory. Seasonal products tend to sell at higher rates, so if you aren’t prepared with enough product in stock, you can damage your relationship with customers with long wait times for their orders. It will take a lot of work and estimation ahead of time in order to remain profitable during the times where there is a high volume of seasonal products.
Bulk Order/Delivery Shipping
With drop shipping, you have to find a way to successfully manage bulk orders. This entails knowing what is available in your inventory and then finding the means to fill those orders so customers aren’t disappointed.
With more standard order fulfillment, workers are able to pick and pack specific products to ship bundles out to customers. This task becomes more difficult with drop shipping because of the inventory challenges: you may have one product but be out of the other two. This can delay shipping and impact the trust you’ve built or are building with your customers.
When drop shipping, you may use FedEx for one order and UPS for another. The inconsistency in shipping partners means there may be inconsistencies with delivery times, which makes order tracking one of the tougher challenges to deal with. However, each of these delivery services is best suited for different aspects of delivery, so it will be up to you as the manufacturer to create some kind of coherency and consistency in getting packages to customers on time.
As an e-commerce business practicing drop shipping, you need to have a system in place with your shipper to deal with any returns. You will likely have to pay the shipping fee for any returned item, which means that you will have paid for the product to be shipped and now you will be paying for its return. This can put small dents into your bottom line, so figure out some kind of deal so your margins aren’t severely affected.
Competing with Other e-Businesses
You can bet your company won’t be the only one selling some of your products. When competing with other retailers who are selling the exact same product with the same imaging, it’s important you show value in other areas. Is your customer service supreme? Is there some kind of cost savings you offer? Or do you have a much stronger variety of products? Whatever it is, show your worth.
Maintain Consistent Customer Experience
This becomes problematic because you are likely using various shipping companies to get your product to the customer. Maintaining a consistent customer relationship is challenging if, every time they order a product, delivery times are skewed. You will have to work extra hard to provide accurate and transparent delivery times so customers grow to depend on your brand.
Just get it in your mind right now that you will always be negotiating price. With drop shipping, so much is unpredictable that it’s difficult to get the best deals from drop shippers. But your bottom line matters, so you’ll have to establish some kind of pricing system that is flexible enough to accommodate your business needs.
Overcoming e-Commerce Challenge with an Order Fulfillment Partner
Partnering with a company like APS Fulfillment, Inc. makes order fulfillment easy. We offer our clients better order control, lower preorder costs, and most importantly, we help provide greater customer satisfaction.
Standard order fulfillment means your entire inventory is on site, so we can pick and pack orders and deliver them to your customers. Plus, having a warehouse means you can actually keep an accurate count of your inventory. This leads to greater accuracy in delivering items to your customers, and it prevents you from having to disappoint your customers with out-of-stock products.
Another big part of partnering with APS Fulfillment is that we take responsibility for your shipments. We have an experienced team of workers who are knowledgeable of the technology that we utilize and will be able to create a system that works well for your e-commerce company.
Of course, saving money and being efficient is crucial to any successful business, but it’s important to make sure you are providing your clients with the very best service possible; you don’t want to put yourself in a situation where your business is constantly overcoming drop shipping obstacles.