Dropshipping has become a popular model of order fulfillment.
Since it is easy to set up and allows businesses to focus on what really matters, it is easy to see why dropshipping is a favorite among e-commerce retailers and influencers.
There are plenty of websites that allow you to get started with the dropshipping model as an individual or a company like Amazon. You can rely on etsy print fulfillment to get custom designs printed and delivered directly to your audience.
You can also integrate the store on your website that is powered by the dropshipping service you are using. Given the amount of time you can save by integrating dropshipping, it is no wonder retailers prefer this model. Around 27% of global online retailers have adopted dropshipping by February, 2018.
But it’s not always a breeze. Using a third-party service comes with its own set of challenges; let’s take a look at what they are and possible fixes.
Challenge #1: Finding a reliable supplier
Even though you are dropshipping a product, you are still responsible for the quality of the product, and that has to do with finding the right supplier or suppliers. You don’t want to end up with a supplier that is flaky and offers inconsistent quality in raw materials.
A lot of dropshipping websites also feature a directory of suppliers that you can use.
Other things you should consider besides reliability are their fees, minimum order limit, industry expertise, and support.
One of the ways you can find a reliable supplier is to ask the supplier for a list of brands they’ve worked with and try to get their feedback. Most suppliers also have online reviews available that can inform your decision. You can also start with a test order to see how they perform before putting in the actual purchase orders.
When you start working with them, have a quality check system and get feedback from users to assess the quality of the product and supplier’s reliability.
Challenge #2: Finding a supplier that is transparent and compliant
In order to be in business, there are several laws that you have to comply with, and so does your supplier. Make sure you work with a supplier that is transparent and meets the compliance rules. Again, reviews from other brands and online review sites can help you make the right decision.
To ensure you’re on the right side of things, have an SLA or Service Level Agreement that puts your needs and the supplier’s offering in explicit detail that must be adhered to, or the supplier faces the consequences.
You should also have a system to track compliance and transparency.
Challenge #3: Managing inventory
If you have more than one supplier, managing inventory can get out of hand. You might also have to deal with excess inventory of a seasonal product if you predict the wrong numbers.
There are many ways to handle this. Use an inventory management system designed for dropshipping so that you can automate the process. The system must be scalable so that you can keep using it as you grow.
Or, you can consider a print on demand service if you sell merchandise. These services incorporate a dropshipping model, but the good thing about it is you do not have to hold inventory. You don’t place an order unless your customer does.
Challenge #4: Handling returns
Since in dropshipping, there is a third party involved, returning a product is complicated. A lot of suppliers have different rules about returns. Some will not accept it outright, and others have complicated rules around it. Since the supplier handles your inventory, you cannot intervene and handle the return.
To get around this issue, you should find a reliable supplier and also be transparent about the shipping, returns, and refunds policy on your website. If you do not accept returns, then you should state that clearly on the website.
h3>Challenge #5: Offering customer support
Again because of the involvement of a third-party, any order related support is difficult to offer without the supplier’s involvement, even if you set up autonomous support. You might have to wait to hear back from them to be able to help the customer, and making them wait more than 5 minutes for a response is already a bad practice.
You need to be hooked into your supplier’s database so that you know the exact status of each order and manage your inventory.
Most challenges involve a lack of transparency that can be solved through due diligence before choosing a supplier and doing a pilot with them before trusting them with your entire business. The other part of it is using technology that is integrated with your supplier’s data so that you have access to all your customer data and their orders so that you can offer better customer support.