THE
DIRECT-TO-CONSUMER
JOURNEY
From the First Order Through Automation
If you ask any drop shipper, and SPS did, they can recall their first order and the anxiety they felt. Here are the learnings from more than 100 experienced direct-to-consumer suppliers shared in a survey conducted by SPS Commerce.
When Will the First Order Arrive?
After signing with a retailer, suppliers should expect their first drop-ship order within a week or less.
What Preparations Should Be Made?
Order volumes can be unknown.
Be ready to intake the orders efficiently using EDI or the retailer’s portal and consider adding staff or hours and/or a small parcel carrier to manage the new sales channel.
What Challenges Will Be Encountered?
Surprisingly the most troublesome part of these suppliers’ early days in drop shipping wasn’t keeping up with orders; it was understanding requirements and providing the data that retailers need.
TOP 3 CHALLENGES
#1
Providing frequent inventory updates to the retailer.
#2
Understanding retailer trading requirements.
#3
Everything else!
Advice From Experienced Drop Shippers
When asked if they were shipping their first consumer order today what would they do differently,
suppliers provided the following suggestions:
Have a little more inventory built up for safety stock.
Check different couriers’ rates.
Start with hiring a 3PL right off the bat.
Bring all drop ship customers onto EDI.
Go completely paperless.
Confirm drop-ship addresses as sometimes the retailer enters it incorrectly.
Be more prepared on the customer service side to process returns.
Have the inventory feed from our ERP fully integrated with EDI platform as to avoid daily manual inventory adjustments.
When to Automate
Drop-Ship Fulfillment?
Deciding when manual entry and processes need to be retooled with automation was driven by increasing volume, complex requirements and limited resources.
THREE REASONS TO AUTOMATE
What Was Their Best Investment?
Suppliers weighed in on what was their most impactful improvement in capabilities to support their direct-to-consumer operations.
How Confident of Drop-Ship Capabilities Can Suppliers Become?
With most respondents having three or more years of experience, 94% reported they are meeting current needs, have extra capacity, and scaled operations to support future growth. Five percent are stretched, and only 1% stated they couldn’t fulfill current or anticipated order volumes.
94%
Confidence in
Meeting/Exceeding
Retailer Expectations
Want More Advice from
Drop-Ship Leaders?
SPS Commerce published a research study based on a recent survey of more than 100 experienced drop shippers. The findings and proffered advice are available in the free report.
