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Omni-channel Retailing for Suppliers: Successful Drop Ship Fulfillment

Posted By Administration, Thursday, March 12, 2015
Updated: Tuesday, March 10, 2015

by Carol Weidner, eZCom Software


Giant e-tailers like Amazon and Zappos have forever changed the retailing landscape. Consumers expect and demand maximum convenience, lower prices, a wide array of merchandise to choose from, and the ability to get products quickly. With the increasing pressure and fight for market share, more and more traditional retailers are implementing the omni-channel model to provide customers the best of all worlds. As these retailers endeavor to seamlessly and efficiently meet the needs of customers at every stage and every touchpoint in the retail process, their supplier partners must support them in order to remain competitive.

There are specific, inexpensive steps suppliers can take to set themselves up for omni-channel success. This second installment of a series that highlights various aspects of a holistic, omni-channel trend, is intended to focus on the supplier's strategy for drop ship to consumer fulfillment.

A survey recently conducted by Retail Systems Research cites cost effective shipping and fulfillment as one of the top three operational challenges for large retailers.1 Many retailers are turning to drop shipping – a process where vendors ship products directly to customers – to help solve this challenge and create efficiencies.

A well-executed drop ship solution can convey significant benefits to both retailers and suppliers:

  1. Chance to compete on a more level plane with e-tailers
  2. Ability to extend product offerings without incurring additional costs and risks
  3. Higher volume direct-to-consumer capabilities
  4. Overall enhanced supply chain and higher profits

Additionally, by demonstrating advanced drop ship capabilities, a supplier can become even more attractive to retailers, giving the company a competitive edge. Plus, drop ship can dramatically increase product distribution and even segue into a stronger presence in retailers' brick-and-mortar locations.

Although drop ship offers suppliers extraordinary opportunities for growth, this fulfillment method also entails its own unique challenges and compliance guidelines for suppliers. The good news is, with the right tools and partnerships, suppliers can overcome these challenges and realize the immense possibilities.

Suppliers need specific, key, high-volume capabilities to adhere to retailers' drop ship guidelines in a cost-efficient and time-saving manner:

  • Custom branded packing slip – To create a seamless customer experience, most retailers require that their suppliers create a custom packing slip that includes the retailer's name, logo, address, website, and any additional required information.
  • Extremely efficient EDI – Drop ship providers must be able to process many documents quickly in order to save time and money. What used to be a shipment of many items to one destination is now multiple shipments of one or two items. Batch processing of invoices, ASN's and other documents is crucial.
  • Integration tools – If possible, it's best to work with a platform that can integrate with FedEx and UPS, which saves time and resources while decreasing the margin of error.
  • Inventory management and visibility – Integrating warehouse and/or inventory management applications with EDI will further streamline processes and enable suppliers to keep up with the pace of drop ship.
  • Special drop ship pricing – EDI services must be priced to ensure the high volume, low quantity model remains profitable.
  • Exceptional customer support – To successfully handle high volume, suppliers need EDI customer service teams who provide education and support whenever needed, for as long as needed, until any problems are resolved.

For retail suppliers, drop ship is not just the wave of the future – it's happening now and those who excel in direct-to-consumer compliance will come out on top of the game.

[1] http://www.rsrresearch.com/2012/11/14/the-multi-channel-retailers-reality-in-a-post-amazon-world-benchmark-report-2012/


Carol Weidner, CEO of eZCom Software, is living proof of the adage "If you want something done right, ask a busy person." Soon after graduating from Rutgers University with a degree in Mathematics, she opened her own successful business – wholesaling home wares and accessories in the New York/New Jersey area. Carol continued in her entrepreneurial endeavors while she returned to Rutgers full time and completed a second degree in Biology. Following her (second) graduation, Carol learned computer programming and focused on EDI – working for companies serving the retail industry and consulting for major retailers like Toys "R" Us. When an opportunity arose to take over a small many-to-many retail portal in 2000, Carol grabbed the reins. She directed the finance and sales side of the burgeoning company, while working together with a team of colleagues who redesigned one of its key products to serve as a web-based EDI application. The result was the B2B supply chain software provider eZCom Software – and the cloud-based EDI solution, Lingo. Carol can be reached at cweidner@ezcomsoftware.com or 201-731-1800. Learn more about eZCom Software at www.eZComsoftware.com.

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Tags:  Drop Ship  Omni-Channel 

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