ERPs Can Help Retailers Capitalize on Drop Shipping

We are in the midst of a drop-shipping revolution. There's just no other way to say it.

More people are shopping online, and more people are buying online.

In 2018, for example, an estimated 1.8 billion people purchased goods online. That's globally. And in the same year, global e-retail sales amounted to $2.8 trillion. The numbers don't lie.

And as a result, consumer goods importers and distributors must have solid plans and processes to sell online and drop ship to their customers effectively.

So, what's this mean for you? That you can not only be a part of the revolution, but you have the opportunity to lead it. You've just got to acclimate. Retailers of every size must find ways to develop the quickest, easiest, and (potentially) cheapest ways to move products from suppliers to customers.

And that's all drop-shipping is. It promises speed and convenience in an on-demand retail model.

Most retailers purchase stock in bulk from suppliers, store it and take responsibility for delivery to customers. Drop-shipping shifts those burdens to suppliers by allowing retailers to buy from suppliers when consumers buy products. The suppliers then take care of the delivery, sending orders directly to the consumer.

You're eliminating the middle man to streamline the delivery process.

Drop-shipping can be challenging, though, because it operates on razor-thin margins. It relies on operational efficiency and streamlined operations. Because let's face it, you can only be as effective at driving business as retailers are at processing orders.

Robust enterprise resource planning (ERP) software introduces the kind of efficiency and visibility in the sales process that retailers need to make it work. An industry-specific ERP is all the better. Our distribution ERP has all the functionality you need to lead the drop-shipping revolution, no matter the business you run or the products you sell.

Large Retailers

For large retailers, drop-shipping instantly removes the limitations on inventory, making every item a supplier has available at any time. Let's break this down a bit further. You sell collared shirts. No longer will customers be unable to get their shirts in the right size, pattern or color. The risk of anything being out of stock is vastly reduced for retailers simply because it's all coming from the supplier. You eliminate the risk of losing business because a product is out of stock.  

You also open up the doors to meet the demand of more consumers. Shoppers want what they want when they want it. They want to be able to click, buy and then track the progress of that shipment all within the span of a few minutes. An ERP makes quick shipping easier—you can designate areas your pick and pack zones for greater efficiency within the warehouse.

Small-to-Medium Enterprises (SMEs)

For SMEs, drop shipping offers similar benefits to their larger competitors, creating a significant opportunity to grow that otherwise wouldn't have existed. For the first time, SMEs will boast a similar inventory of products as the more established brands in the sector, providing they have the supplier deals to back this up. The potential here is limitless.

And to do this effectively, you need visibility and clear communication from everyone in the supply chain. The only way you get this is with software that updates in real-time and is a single source of truth. Everyone needs to be working off of the same information to ensure inventory, pricing and ordering accuracy. And with these real-time updates, you can make adjustments quickly and easily, if necessary. It supports streamlined operations and efficiencies in every department. You're creating a culture of excellence—a culture where efficiency and visibility are at the forefront.

If you were to have some sort of supply chain disruption and your shipment, for whatever reason, is delayed, you'd be able to notify your vendors and customers, adjust timelines and quickly adapt to these new changes.

Entrepreneurs

Drop-shipping makes it easier than ever to run your own retail business effectively. Turning retailers into third-party bridges between suppliers and customers means that an individual with a laptop and an internet connection can get their business off the ground with very little capital investment.

The key to unlocking these benefits, no matter the size of a retailer, is an ERP providing complete visibility into the sales process. Having access to a wider range of products on-demand sounds promising, but it isn't an automatic benefit.

The right ERP offers the ability to efficiently and effectively process orders and reap the rewards of drop-shipping. Because the rewards are good. Really good.

With the right tools, you can easily adjust to changing consumer buying habits, exchange information in real-time, manage shipments efficiently and streamline all your processes. Don't get us wrong, it's a lot of work. But it's work that's worth it if you plan to run a successful business. And all that work is made easier with the right ERP.   

Our Director of Business Development and Project Management, John Weber, wrote about Why an ERP Is the Key to Unlocking the Future of Retail in Retail Technology Review. It's a really great piece that offers detail and insight on how to lead the drop-shipping revolution.

And if that's not enough for you, we've got a full team of experts on standby, ready to chat whenever you are. If you're ready for what's next, reach out now.