Dropshipping is one of the newest e-commerce shipping strategies and the application of dropshipping in omnichannel presents numerous opportunities for today’s shippers. Dropshipping effectively eliminates the burden of maintaining inventory and opens the door to less risk within an organization. Supply chain leaders, however, need to understand that dropshipping in omnichannel does come with challenges, as well as benefits. Following a few simple tips and best practices can mean the difference between success in the connected supply chain and lost revenue.Listen to “The Role of Supply Chain Technology for More Effective Inventory & Warehouse Management” on Spreaker.
What Are the Challenges in Dropshipping?
Any change in standard operating procedures, including your shipping processes, will be met with challenges. These may include:
- Limited technologies. Limited technologies within your organization will mean more manual processes to send incoming orders from your organization to a manufacturer, and the entire process could break down.
- Poor collaboration among supply chain partners. Failure to maintain collaboration across your supply chain network and all applicable partners may lead to additional problems and delays within order processing and shipping, and customers will hold your business accountable.
- Failure to implement and integrate new systems and technologies. Dropshipping relies on streamlined processes and a seamless flow of information throughout your network, so inability to take advantage of new technologies that enable such processes will result in added dropshipping challenges.
- Limited visibility into dropshipping practices. Limited visibility is another problem that exists with dropshipping. Poor visibility within your operation will result in a failure to understand how the strategy compares in terms of cost and benefit to your organization. It will also cause inefficiencies.
How Does Dropshipping in Omnichannel Benefit Supply Chains?
Deploying dropshipping in omnichannel processes can benefit supply chains in profound ways. For example, consider these benefits:
- Dropshipping is crucial to fast, green shipping. More movements within the supply chain will effectively increase the emissions associated with orders. Dropshipping eliminates the middleman and reduces the timeline to delivery.
- Dropshipping in omnichannel leads to increased revenue. Depending on industry and sector, 66% of retailers report that the use of dropshipping also increases revenue to the tune of 14% or more, notes Customer Think.
- It increases customer service. According to TotalRetail, 84% of retailers report improved customer service after the adoption of dropshipping in omnichannel operations.
How to Leverage Dropshipping to Its Fullest Potential
- Know your freight billing procedures.
- Create a standardized onboarding process.
- Upgrade your shipping management software.
- Validate shipping and consumer data through automated resources.
- Never limit carriers and shipping options for retailers.
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Put the Power of Dropshipping to Work in Your Supply Chain
To ensure your organization has the tools and resources, as well as technologies, in place to enable dropshipping, supply chain leaders should work with an established supply chain systems integrator and consultant, like Veridian. Learn how dropshipping in omnichannel can benefit your organization following the tips provided, as well as recognize the risks that are present.