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How To Manage Your Wholesale Drop Ship Product Supplier |
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There are two very different ways a retailer relates to their
inventory. On one side, a retailer's inventory can be the heart of
their business, and it helps define them and might guide how they
present themselves to the public. In fact, can a retailer be a
retailer, if they have nothing to sell? On the other side, inventory
can be a major expense and risk to the reseller. Retailers must not
only decide what to sell but they must answer other basic inventory
management questions. How much do they buy? How long can they afford
to have it sit on the shelf? How do they store excess inventory?
For some retailers, how to manage inventory is not just a component to
address in the supply chain, but it is THE component of the supply
chain. For example, having the wrong product in the inventory stock
can be detrimental. Would you want to have a warehouse of buggy whips
as more carriage owners switch to automobiles or expensive typewriters
as PC's and word processors hit the market? You would have to
eventually unload your products at drastically reduced prices, even at
a loss. Some products might also have a limited shelf life, and this
does not just pertain to produce. For example, some high-end
electronics might come with expensive wholesale prices, but the models
might frequently change with additional technological improvements
making items in your warehouse less attractive to consumers. Other
products might just be part of a temporary fad. While fads can be
great trends for retailers to take advantage of, you would not want to
own the largest showroom for "Bell Bottoms R Us" at the start of the
80's. Effective retailers are those who can manage their inventory so
they do not have too little stock of popular products and miss sales,
but also those who avoid having too much product stored when models or
trends change.
For ecommerce merchants, drop-shipping can help avoid some of these
risks and help promote a healthy relationship between the retailer and
the products they sell. Drop-shipping also helps new or existing
entrepreneurs to enter the online market place by allowing new ventures
to start without significant upfront capital to stock the shelves.
In a nutshell, drop-shipping works by allowing retailers to sell a
product while the suppliers make and/or store and ship the product to
the customers who buy the product.How to Manage Your New Supplier Relationships:
Reading this, you might have decided that drop-shipping is right for your business. There are advantages to using drop-ship resources, but do not let these advantages make you think that by working with drop-shippers you have dropped levels of stress or work required for you to succeed in ecommerce. You might not need to worry about finding and managing products to stock and sell, but you still have plenty to worry about regarding finding and managing your suppliers.
You have addressed a simple question: Can drop-shipping benefit my ecommerce business? A harder question is, "Which drop-shipper or combination of drop-shippers is the right fit for my ecommerce business?"
When you market drop-ship products through your ecommerce site, you do not need to stock inventory, but drop-ship products are still important assets that you must control. The first step in maintaining control over your product lines is controlling the relationship with the suppliers with whom you decide to form a partnership. Be careful when first selecting your suppliers. As an on-line retailer you want to make intelligent decisions regarding your inventory suppliers, just as you would if you were a hot dog vendor or Wal-Mart. You will not benefit from a beautiful site design with a great logo, content, and quality service offerings, if you do not also place the same attention on the products that you sell.
Regardless of whether you are getting started from scratch or looking to add new suppliers to a current ecommerce platform or online marketplace, there are a few things to consider.
• Research the supplier record at the Better Business Bureau Reliability Program. You can run a quick search for any potential issues through the following link: http://search.bbb.org/search.html
• You want to assess their wholesale experience and staying power by understanding how long they have been a wholesale supplier. You do not need to avoid new suppliers, but a good track record is always a plus.
• Along with a solid wholesale track record, you want to know how long have they been offering drop shipping services. This is more significant question for your business. It is easy to find people willing to offer a drop-ship service. Some middle-men or even retail businesses might be willing to let you sell their products that they ship to your customers, but the existence of a drop-ship program might not mean it is a real drop-ship offering. Some businesses find it as an easy way to extend their own retail business or market their own products to a wider offering. After all, for the right price, most businesses might be willing to do anything, including drop-ship if it means more business for them. You want to sell products, not merely act as a "referral business" for other services.
• One question most new customers are not afraid to ask, but it is still good to mention here is, "What will the service cost me, the reseller?" Many of the larger and more established firms do not charge a setup fee, monthly product access fee, or a per order transaction fee. If you are looking at two similar suppliers, a simple fee assessment is an easy tie breaker. Some web-articles will tell you that any supplier that has access fees or set-up fees is a "scam" or a "middleman". In many cases, this is a safe rule to follow, but there are some very safe and established suppliers who might charge the fee to help limit their vendor network to more established or "committed" enterprises. Regardless of your comfort with fees or costs, you need to ensure that these costs are considered as you formulate your product pricing strategy.
• "Control" your products by understanding what their drop-ship service offers you as a retailer and how their drop-ship offering is part of their strategy. Some suppliers who drop-ship might still be willing to sell products to consumers directly. This does not necessarily mean that you cannot take advantage of their program. However, you gain control of the products you sell from them by understanding the specific wholesale discount that they offer. Do not waste your marketing efforts selling a product that puts you into competition with your own supplier. If they have a wholesale and retail presence, you need to verify that the products are offered to you at a wholesale discount, not merely their own retail price.
• Inspect their products to verify that they offer name-brand products. You do not need to focus on only selling particular brands, but do not discount the selling power of the brands you offer. Price is always important when selling a product, but a name-brand product can add more power to your marketing efforts. Quickly building trust with your customers is as important, if not more so, when selling products through the internet as it is with traditional storefronts. Even simply offering a few recognizable product names for a category might help sell an item to a timid shopper new to your site. Likewise, it helps you, the reseller, trust a potential supplier. Manufacturers who have spent a lot of time and money developing a trusted brand do not want to work with suppliers that might jeopardize these efforts. A supplier with name-brand products might not be a fool-proof assessment tool as you begin your research, and name-brand product offerings might not be part of your business strategy, but it is an easy place to start.
• Can you trust their supply chain? When you form a relationship with a supplier, their supply chain becomes part of your supply chain. You might want to determine how often they ship the wrong product or quantity. You can assess how quickly they process the orders.....and you thought drop-shipping would make everything simple. In many ways it does. It is "easy" to be an online retailer, but it is challenging to be a smart and successful online retailer! Do not forget that "E"-commerce is still part of "r-"E"-al commerce". Unexpected issues happen all the time with supply chains. However, some upfront research will make you more informed and prepared. Also, part of your success in ecommerce will be dependent on how accurately you set your customers expectations about when and how the products will arrive. You need to spend your time marketing and selling your site's offerings, not addressing customer complaints or tracking down orders because you chose a supply chain provider that you cannot understand or "control". To find quality suppliers, the research requirements are less important when you use Inventory Source. We have done the research for you. (When you have registered for an Inventory Source account and verified your account for free, you can access the quality suppliers in our network with the Inventory Browser link in your Inventory Source menu.) However, if you are blinding finding a supplier off the internet, you will want to conduct your own due diligence to understand the reliability of their program.
• Do they match your supply chain and general policy expectations? Like the point above, it is important to realize that when you use a drop-ship supplier for some or all of your products, you are not operating without a supply chain. You are operating your business with someone else's defined supply chain approach. You need to determine if you can trust their inventory management approach. The next step is you also need to determine if that approach is something that matches your expectations for how you service your customers. You can find out how often they update their inventory stock data to determine the accuracy of their product quantities and offerings. You can learn how they handle back orders if they occur, so you know what to tell your customers who make specific requests. You need to understand their shipping options, so you can inform your customers and include the correct costs in your pricing structure. Also, you need to learn how they handle returns or refunds. These questions might not be rocket science, but they will impact the type of service response you can offer your customers. To determine which suppliers to invite into your supply chain approach, you should obtain a basic understanding of their service to determine if it is agreeable with you. After all, no matter how good an inexpensive Checker's pizza might taste, if you or your friends want a pizza delivered in 30 minutes and Checker's delivers them with a promise of 48 hours, it would not be your best recommendation for a last minute dinner option. Answering some basic questions will allow you to determine if they are a match for you, and presenting these details on your website will also help your customers to determine if they are agreeable for them.
Conclusion:
In short, if you have a question or a concern about a potential supplier, do not be afraid to ask them. This is your business and they need you just as much as you need them. You might interview or research someone to cut your grass, why would you not do the same for the person who is going to supply and ship your products? You might never be on a "first name basis" with your supplier, but working with them will still be a relationship that you must work on for it to succeed.
To find suppliers on your own please read Inventory Source's, "Introduction to Drop Shipping" . We at Inventory Source want to be a value-adding resource, but we do not require you to use us as your only source. You are welcome to search, research, and use any supplier that you find. In fact, some of our successful subscribers like to combine several Inventory Source automation subscriptions with an additional small supplier that they found on their own. A small supplier might only offer three or four products which are easy for you to monitor and update, but could serve as a nice complement to the hundreds or thousands of products that you are able to sell with our file downloads or automation service.
The Inventory Source Advantage:
Just remember that there is no "easy button" for succeeding at ecommerce, but we do like to help keep things simple for you. If you are uncertain about any supplier, just know that the suppliers that Inventory Source has invited into our network are all VERY well established suppliers who have been doing wholesale and drop ship business for years, even decades. We only recommend suppliers that have a large selection of products, have established processes and policies, and that are 100% reliable and responsive to the resellers of their products. We provide you with all of the required contact details for each supplier in the Inventory Source Network. Also, when we can, we work to negotiate the removing of any set-up fees for resellers who find their products through our site.
We are constantly assessing our current supplier network and additional suppliers that we hope to add and have compatible and accurate inventory information systems to serve our service subscribers. We take the feedback on our supplier network from our employees, our service subscribers, and the drop-ship community at large very seriously to ensure you are able to work with solid performers. Suppliers do not pay us to gain access to our automation network. Inventory Source succeeds when YOU, the reseller, succeeds.
www.InventorySource.com wants to serve as your drop ship inventory resource. We think you should work directly with established drop-ship programs, so you get the prices and products they set for you. That is why we do not act as a "product catalog" site, limiting the products you can sell or offering you products with prices that we mark-up and resell to you. You don't need to stock inventory, but drop-ship products are still an important assets that you must be free to control. That is why we work alongside your business, and not in-between you and the supplier.
We want you to have access to thousand's of quality products and services from multiple distributors so we can serve as your trusted inventory resource. We are here to help you to manage the selling of one product as easily and as accurately as selling thousands of products.
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