Can your website dropship from more than one vendor?
This article will show you how to drop ship with multiple suppliers, even if you are just starting drop shipping.
You may ask, “But, how is it different?” What makes it so different to dropship with multiple suppliers?
Drop ship business models are complex and have many moving parts. You can see in my previous content about drop shipping that there are many operations that must be running at all times for a sound function.
Drop ship businesses are full of challenges. From finding the right products, to forming supplier relationships, to organizing product data and listing them all the way to customer service, there is so much that can go wrong.
Don’t worry! I will show you how to dropship with multiple suppliers to ensure that you don’t send an order from Supplier X, to Supplier Y.
This would be confusing for many people, and no one wants to work alongside someone who is confusing them.
Benefits of having a reliable supplier
Before we get into any more detail, we want to remind you…
Good (and reliable!) suppliers are essential.
Treat them as if they were gold when you find them.
Your business’s growth is dependent on suppliers. Particularly Dropship Suppliers as they are responsible for shipping and handling your products.
You might also be able to get some really cool deals if your supplier is close. These include:
Higher quality products
Ever get so excited when you receive an item you ordered online, only to find out that it is not what you expected? Yes, I’ve done it. It’s terrible!
Dropship suppliers will handle and ship the products you order (and orders from your customers), so it is important to ensure that they send only high-quality products.
Although I don’t think you should be best friends with your supplier to get better products, consider this:
Do you prefer to give your best products or your closest friends?
You know the answer, I believe.
Support of higher quality
Although you don’t need to jump through hoops in order to build a strong relationship with your supplier you will need to put in a lot of effort to establish trust and support.
Your supplier is your business partner. Without them, your business would be a complete failure!
Here’s an example of how your support system should look for you and the supplier.
Let’s suppose you have a strategy to increase your sales volume. To meet the demand, a supplier that is supportive would review what needs to be done on both your and their side.
Your greatest supporters are your suppliers. If you are respectful of their needs and respect them, they will be respectful of yours.
How to build a good relationship with your suppliers
There are many ways you can maintain a stable, successful relationship with your supplier.
If you are willing to work hard for it.
Let’s take a look at the top 7 ways you can keep your suppliers (and you!) happy. happy.
1. You must pay your supplier promptly
It’s obvious that this is important, but pay your bills on-time.
Your supplier must make money to continue their business.
Avoid delaying payments if you want to be viewed as a responsible business partner.
But, sometimes things happen. Be sure to notify your supplier if you feel the need to defer paying them.
2. Get in touch with your supplier
Reach out to your supplier at minimum once per week. Discuss which products are doing well, what your business is doing and how you are feeling about working with them. It’s a great way to show appreciation.
3. Make their life easier
It’s not difficult. Respond to their emails immediately. If they call you and you are unable to answer, contact them immediately. Do not leave them hanging! Do not agree to purchase a bunch of products and then suddenly change your mind.
4. Be friendly with their representatives
Do you know how some people can be warm and friendly in person but seem hostile and rude via text messages? You don’t want to be that guy.
It’s the little things that make a difference. Instead of saying “I’m placing an Order for X More Product JZ800”, take a second to say “Hey! Hope you’re doing Well!”
You can ask for a favor by prefacing your message with “I hate you to bother you but I was wondering …”.”
It will be amazing how friendly your suppliers and their reps are when you put in the effort to be friendly.
5. Your supplier should be given plenty of time to deliver the goods
Your supplier is not the only one who doesn’t like being rushed.
Last-minute orders: Our advice? Avoid them at all cost.
They cause stress on both your end and the supplier’s. If you make your supplier scramble for your orders, it will definitely harm your relationship.
What happens if your supplier fails to deliver the goods despite their best efforts? You might be disappointed by their attempts to cut corners, but this will only lead to more problems down the line.
6. Get in touch with them to share insights
Inform your supplier about any changes in key personnel, new products that you might like to try, or special promotions that you would like to do.
Keep them informed about what’s happening and share any thoughts. You never know, they may have great ideas.
7. As soon as possible, address any problems
Don’t leave your supplier out in the cold if something goes wrong
Let’s suppose your customer gets a defective product and leaves a bad review on your site. Then, he or she demands a refund.
Instead of attempting to solve the problem yourself, reach out to your supplier for help.
Discuss the causes and how to prevent it from happening again.
Even if things get heated, it’s important to have a conversation.
How to DropShip with Multiple Suppliers
You must first establish more than one supplier relationship before you can drop ship to multiple suppliers.
Refer to my previous articles to learn how to contact suppliers and build strong relationships.
If you have several drop ship suppliers, it is important to know how to manage your operations so you can get orders.
Many online retailers will tell customers that managing inventory and orders can be difficult. Traditional retailers are responsible for managing physical inventory. Each task has its own unique organizational challenges, including organizing, packing, shipping, and storage.
Dropshipping is a new way for online retailers to sell products. Their problems lie in the management and ordering data, not the physical and logistical management faced by traditional retailers.
Dropshipping is a way to sell products directly without having to store them in a physical location. You purchase the products individually once an order has been placed through your website. Your supplier then ships the product directly to you, on your behalf.
As you can see, “managing inventory” is a different concept when dropshipping is added to your supply chain. To ensure that you are in sync with dropship suppliers, it is important to pay extra attention to your inventory and order management processes.
Set up the Relationship Upfront
If a supplier says “Yes, we’ll be working with you”, don’t jump to listing their products. Talk to them over the phone, asking a few important questions to establish your expectations for your relationship.
This is a crucial step. Drop shipping was my first venture. I didn’t have a process to onboard new suppliers. This led to confusion and chaos months later. My processes were inefficient because I couldn’t figure out where to send orders when I received orders. This is not what you want.
These are the subjects to be covered when you set up a dropship supplier relationship.
- How do you get the product data across? To properly list products, you need to organize product data. You won’t be able create high-quality listings or distinguish between products of different suppliers if you don’t have it.
- Once I receive them, where should I send my orders? What is the best way to get them? Email? Email? Etc.
- How do I receive inventory updates for my products? This data is necessary to ensure that you don’t sell out-of-stock products.
- How should customer service tracking, returns and exchanges be managed?
All of this information should be written down in a Google Doc that you can refer to when you work with the supplier.
You can take it further by having both parties sign the terms and agree to them electronically. This will allow you to bring it back in play in the event that the supplier defaults on any term.
Multi-Supplier Integration Points
Your Inventory & Order Management are two of the most important business processes and integration points when working with multiple dropship supplier suppliers.
Dropshipping is characterized by “Inventory Management”, which means that you prevent stock sales from happening. There is nothing worse than being unable to fulfill an order and receiving it. Dropshippers must sync dropship inventory daily from their warehouse system to their online shop at least once a day to avoid out-of-stock items.
Dropshippers that sell from multiple dropship providers face additional challenges in order to sync inventory quantities and ensure orders can be fulfilled efficiently, and most importantly, without errors.
Dropship order management and inventory management go hand in hand. One cannot have the other without the others. Online retailers can efficiently route dropship orders using key principles such as SKU uniqueness, product overlap management and data integration. Customers are automatically updated with shipment tracking information.
Ensuring SKU Uniqueness
Even if you don’t have any stock, the SKU still has significance. SKU stands for stock keeping unit. It is the unique way that a product can be identified.
Dropshipping can be problematic because your supplier “keeps stock” and is therefore responsible for managing the SKU numbers. It is possible to imagine that suppliers only care about identifying their products and would not want to allow duplicate SKU numbers from other suppliers.
A system is the only way to control this and ensure SKU uniqueness. Inventory source uses a system that prefixes SKUs with initials of the supplier. You can quickly determine if an SKU has been listed by a supplier. It eliminates the possibility that duplicate SKU numbers can be created if each supplier has their initials kept unique.
Bob’s Distributing identified a product in their inventory as SKU123
Dan’s Pet Supplies identified a product in their inventory as SKU123
To avoid duplicates in your online shop, you should track two unique SKUs. This will ensure that accurate inventory data is available and orders are routed correctly.
You would then prepend each initial to be managed as:
Bob’s Product = BDSKU123
Dan’s Product = DPSKU123
No duplicates… simple unique SKUs.
Unique SKUs can be shared among suppliers to allow retailers to manage inventory quantities, prices, and other data.
It is easy to identify the supplier by using the “supplier initials” and the original SKU. This allows you to route product orders to the right supplier.
There are many ways to guarantee SKU uniqueness. However, we have found that prefixing the SKU name with the initials of the supplier to the original SKU helps retailers quickly identify the supplier. This allows them to easily determine the original SKU number maintained by the supplier. This information is likely to be required when the customer orders the product.
Unique SKUs are a great way to ensure that automated order routing is set up. This will allow you to be confident that the orders are routed to the correct suppliers and with the correct products.
Multiple suppliers may have the same product. This is called “Supplier Product Overlap”. It can complicate the order routing and inventory management.
Supplier Product Overlap
You may be able to have multiple suppliers who stock the same product. An online retailer listing inventory and routing orders through a dropship supplier requires more management attention than a traditional retailer who simply buys the products wholesale and stores them.
Dropship offers many advantages. You can list more products on your website than it costs to buy wholesale. It makes sense to maximise the time that dropship products remain “in-stock”. Multi-supplier inventory listings mean that you will only need one product listing for your ecommerce store in order to provide a seamless shopping experience. This product listing is generated by two different vendors, who most likely have two different stock amounts.
To keep your product listing “in stock” and to increase the likelihood of a sale, list the quantity in the sum of two suppliers’ product quantities.
A “summed inventory” approach has its downsides. For example, if you have a split order and need to ship the product to multiple suppliers in order to meet the ordered quantity. You will now need to pay twice for shipping and the product will arrive in two different boxes, most likely at two different times.
A way to avoid “split orders”, is to compare the inventory counts of multiple suppliers. This eliminates the possibility that a supplier cannot fulfill a larger quantity than the one listed on the website. This will reduce the time it takes to list a product on your website. However, it may prevent you from fulfilling unprofitable orders or offering poor customer service.
Both a “summed”, and “averaged” inventory approach will require Dropship automation Software. However, this can also be done through spreadsheet functions or manual importing.
Cross-Supplier Split Orders
You might be thinking, “Okay, so I can stop split orders in the instance of a single product. But what about in case of multiple products from multiple vendors?”
Unfortunately, there’s not much you can do to stop this. This is a common problem with multi-vendor dropship fulfillment strategies.
You can reduce the likelihood of split orders by choosing suppliers who have very different product lines. This will make it less likely that they will be combined in the same order. A common way to avoid split orders is to work with large distributors that have multiple product lines. This will reduce the need for suppliers to stock the products you want to list on your site.
Multi-Supplier Dropship Strategies
Building relationships with multiple suppliers on a dropship basis can have strong incentives and benefits. Multi-supplier strategies can be a good option for retail businesses. They offer greater pricing leverage, increased product availability, and more products to choose from.
Dropshipping with multiple fulfillment partners can be difficult. You will need to remember that even though the products are not physically managed by you, there is an administrative layer that must be coordinated and maintained. It takes a little planning and investment upfront to create a multi-supplier fulfillment strategy that will give you a competitive edge as well as an effective one.
How to keep shipping effective
Do you want your shipping to go as smoothly as possible? These are the top tips to keep in mind when shipping.
You will receive confirmation that your order has been received and will be fulfilled
This is why an inventory management platform is the best option.
If this is not possible, ask your supplier to confirm receipt of your order. This can be done via an acknowledgement slip or casual email response.
Know the lead time it takes for your supplier to ship the items
Many business owners will attempt to cut down on the lead time of suppliers by a few days.
If your supplier says that an item takes 5-8 business days to reach you, then it is likely that the item will arrive within 5-8 business days.
Deliver to Customer Expectations
Honesty is the best policy.
Let your customers know in advance if a product takes longer than 5-7 days to ship.
If you are certain that your supplier will not be able to deliver the item on time, don’t offer Express Delivery or Next Day Delivery to your customers.
– Include a realistic delivery time in the product description.
– Repeat it at the checkout.
– Include it in your Frequently Asked Question (FAQ) section.
– Give a time frame for customer to contact you. (Example: Delivery can be up to five weeks. Contact us if you haven’t received the package yet).
Offer free shipping It will be more accepted by your customers.
Track your supplier’s product movements
Tracking is easy if your supplier sends their products via ePacket.
If your supplier has just sent the product out, or if it is already in China, you can track the parcel using EMS.
Here are some things you need to know in order to avoid any problems with customs
Dropshipping items via or ePacket is easy. You’re all set.
What if you ship items using a private carrier like DHL? DHL will pay import duties and taxes for you to speed up delivery. You can also request reimbursement later.
These taxes and duties are usually charged to the recipient (ie your customer). However, you can choose to have DHL charge you the fees instead by choosing “Delivered Duty Paid”.
What happens if someone returns a product you dropship?
Let’s suppose a customer wishes to return a product. What now?
Request an RMA number (return merchandise authorization), from your supplier. Your customer can then send the item back.
Your supplier will then either refund you (so that you can reimburse your customer) or send you a new item.
Keep in mind that not all suppliers will accept returns. If your supplier is not willing to accept returns, it could lead to a very long wait for your customer.
This way of handling things could lead to unhappy customers. We now have the second option…
You can purchase a new item directly from your supplier and then have them ship it to you.
Your customer will receive a new product in this instance without having to return the one they already have.
Although this is the more costly option, you can bet your customers will be happy to recommend you to their friends.