As a dropshipper, your supply chain influences everything you do. But the synergy between your products, suppliers, the manufacturer, and customer mean dropshipping comes with a lot of moving parts.
Order fulfillment relies on a delicate dance between the manufacturer (the business that turns raw materials into products), the wholesaler (your supplier), and retailers like you. As a dropshipper, you can get your manufacturer or wholesaler to fulfill orders and send products to the customer while you focus on sales and marketing.
It all comes down to proper eCommerce fulfillment. Know how order fulfillment works and follow this 5-step process to fulfill orders more efficiently.
Customers are clamoring for your products and now it’s actually time to fulfill their orders. Order fulfillment is the process that happens after you take a customer’s payment. It’s how, from start to finish, you take products from a manufacturer and get them to the customer.
Dropshipping is actually a type of order fulfillment. You’re shipping products from a supplier and selling them to the customer. You facilitate the transaction without so much as touching the products. You’re acting as a middleman that does marketing and selling. Done right, dropship order fulfillment will automatically push orders from your website to the supplier’s system, which the supplier then fulfills and sends to customers.
Fulfillment is a holistic process that involves other disciplines like:
If that sounds like too much of a hassle, don’t worry. As a dropshipper, your supplier will streamline most of the fulfillment process for you. A supplier is great to have when you have dozens and dozens of orders every day. But even with a supplier on your side, you need to fulfill dropship orders in a way that makes the most sense, maintains customer satisfaction, and keeps you profitable.
Curious how dropship order fulfillment works? Every order should go through these 5 steps to complete the transaction.
To kick things off, you’ll decide what product you’re going to sell. From there, the supplier will guide you on pricing, minimum orders, and other fees. They’ll also provide you with product photos and descriptions, so you can sell without even touching the products.
Nice, right? Well, some of this process still involves manual work. You can use a solution like Spark Shipping to automate a lot of the inventory management process.
After listing the supplier’s products on your website, you get to work marketing and making sales. A customer will place an order from your online store, which sets off a chain of fulfillment actions.
Both you and your supplier will then get an email about the order, which will come from your store automatically. The customer’s payment will hit your bank account, too.
After processing the customer’s order, your systems will turn around and place an order with the supplier for the product.
However, most systems don’t automatically forward orders to your supplier. Unless you want to send 100+ manual emails every day, you need an automated system like Spark Shipping to directly integrate with your supplier’s order processing system.
Once the supplier receives your order, they will charge you the wholesale price, shipping, and any other fees.
Once they receive your order and your payment, the supplier takes care of fulfillment. They pick, pack, and ship the order directly to the customer, but your name, address, and logo will be on the packing invoice.
After they prepare the product for shipping, the supplier will send you an invoice and tracking number. You’ll either need to manually receive each tracking number (and enter it manually into your marketplace) or use an automated system like Spark Shipping to directly integrate with the supplier’s tracking system.
From here, you’re responsible for passing the tracking information to the customer.
Depending on your supplier, you might be billed for each order via a credit card that you keep on file or the supplier will invoice you every 30, 60, or 90 days.
This is something you’ll want to negotiate with your supplier ahead of time. At first, the supplier might only offer you pre-order billing, but you can likely score credit terms after building a solid relationship with your supplier. That’s essential for improving your cash flow, so don’t overlook the power of a good supplier relationship!
After you pay your supplier, the transaction is officially completed. As a dropshipper, you get to pocket the difference between what your supplier charges and what the customer pays. To give you an idea of your profit margins, the industry average for dropshippers is 20%.
Don’t fret over how to fulfill dropship orders. You’re functioning as a middleman who passes the ball between a supplier and the customer. When you work with a trustworthy supplier, you’ll see lower risk and a lower barrier to entry in the world of dropshipping.
Dropshipping can be what you do forever, or it can be a stepping stone to becoming an eCommerce juggernaut of your own. Some dropshippers even go on to do their own fulfillment, cutting out the supplier entirely. It’s all about how you want the future to look for your business.
No matter where you want to go in the world of eCommerce, automation is the key. Free up more of your time, maximize profit margins, and reduce errors with a smart automation system like Spark Shipping. See how we help dropshippers ruthlessly eliminate any inefficiencies in order fulfillment.