What does drop shipping mean for your retail operation? This past holiday season, 34% of Americans completed 50% or more of their shopping online, which is a 99% increase from 2006.
These statistics pretty much sum up the state of traditional, brick-and-mortar (BAM) stores. The growing consumer trend is increasingly in favor of non-traditional methods for purchasing products. The trigger effect for this major shift in the retail fulfillment industry, of course, has everything to do with Amazon and other online retailers.
By upping the ante with what seems like a continuous stream of innovations – like the Price Check app, which encourages shoppers to scan an item in a BAM store to see if Amazon has it at a better price – retailers are rethinking their business model in a big way.
Drop Shipping Is Set To Be Mainstay On The Retail Scene
BAM stores are now moving towards harnessing the power of drop shipping to beef up inventory (and add convenience) for their loyal customers.
Think about it: Consumers walk into Best Buy and have a pick of several different makes and models of headphones, or they simply sit at home and browse Amazon’s pages and pages of headphones at a wide-range of price points and a much greater selection.
For this reason, Best Buy, Target and many other big-box stores are turning their websites’ focus to drop shipping, where online sellers feature their products. As an online business owner, this is a huge opportunity for you because you’re now able to sell across more and more platforms along with your own website.
Drop Shipping: More Sales, More Logistics Problems
Best Buy and the other retail stores do not have the space and number of warehouses that Amazon does, but they still need to be able to compete with Amazon’s wide range of products and low price points. To do this, they are implementing an ecommerce drop shipping component to their business. Best Buy doesn’t keep your goods in stock. Instead, they transfer customer orders and shipment details to you, and then you and your 3PL are responsible for drop shipping the goods directly to the customer.
The problem is this: Although you have more places to sell your products (a good thing), as sales increase (another good thing), inventory management and order fulfillment become more complex (a big potential problem).
If you’re unable to effectively manage your inventory and order fulfillment, this is going to be a big issue for a brand like Best Buy. Essentially, as a seller on their website, you represent their store. If you’re accepting orders but run out of inventory, this reflects poorly on Best Buy.
Drop Shipping Services Help Maintain Your Order Management
Each time you get a sale, you need to recognize that your inventory has decreased. The solution to effectively manage your products selling across multiple platforms is by partnering with a third-party logistics (3PL) provider that handles your order fulfillment while also adopting multi 3rd party marketplace order management software, such as SellBrite, that’s designed to handle your multi-channel listings.
Drop shipping software options like SellBrite allow you to manage all of those different platforms in one central repository. The software should integrate seamlessly with your 3PL provider (or drop shipper). Your 3PL/drop shipper simply stores your inventory in one central place and drop ships the orders to your customers as they feed in from the order management software system.
Drop shipping perfectly fits the growing trend of ecommerce. In fact, in the future, we could see traditional retail stores become showrooms while the real retail fulfillment happens online or out of view from the consumer.
Ready to learn about more drop shipping solutions for your multi-channel ecommerce business? Call 800-808-3304 or click here to speak with a drop shipping expert at Moulton Fulfillment.