Order Fulfillment Processes in Drop Shipping Businesses

Low-investment and profitable business

Being a retailer for a wholesale company on a drop-shipping setup is a low-capital business model for small entrepreneurs. Often needed are average online marketing skills that work hand in hand with order-taking processes. As well as time in one’s hands to run the businesses.

Social media easily connect drop shippers to consumers

The adoption of social media by almost every human being in the world has also opened doors for business people with little or no marketing budget. The excellent news is wholesalers are usually very bad at online marketing or marketing in general. You have the following likely advantages in finding customers over wholesalers:

• You speak the language of your potential buyers
• You have the time to learn or improve online marketing
• You are not stuck with the product quality (i.e., you can switch products and deal with another wholesaler or manufacturer)

Besides the above, you are likely to have a better social media presence than a typical wholesaler – which is to say, you probably have a personality and know the kinds of people who will buy the products you are selling.

What to sell?

You may have already decided on a market and the perfect product to sell. But which wholesaler or drop ship company will be your lucky supplier? This is a question you will ask yourself constantly. You may find changing a supplier to be a freeing experience, but ultimately, you will judge a supplier based on success on your end.

The cost of the order fulfillment process

Now that we’ve given a brief overview of drop shipping, we have come to the main topic of this post: parts of order fulfillment will cost you time and money. Yes, even if you are an online marketing genius and get many qualified buyers to click on your product page, you still need to ensure orders are taken and buyers pay.

1. Customer service – selling on eBay or owning your website will influence how you deal with customers and the inherent cost of customer service. Can you control bad reviews? Do you worry that you will get penalized for non-delivery?

2. Taking orders – Let’s assume your online sales are not automated. You’ll need someone to take orders. It can be over the phone or electronically. Less obvious is that you may also need to allocate a lot of time to ensure the supplier processes your customer’s orders.

3. Accounting – money will come your way, and some will leave your hands and end up with the supplier. You will start doing the accounting, but as the business grows, you may decide to hire someone.

4. Product return – if you offer a return on an order (and you most likely will), you must set up an arrangement to reduce risk and maximize profitability. Are you able to physically check order returns?

Outsourcing fulfillment gives you a head start.

You can be an online retailer with very little capital. Customer service can wait until you are a bonafide success. However, some may find it wiser to invest in customer service before sales begin to ramp up. There is a good reason for this. For online retailers, that mean businesses, customer service will be part of the initial cost and marketing budget.

Magellan Solutions has received numerous inquiries from the drop-ship business requiring order takers and customer service. The cost savings are significant enough to allow enough preparation time to accommodate the projected sales and room for optimism.

Please send us a message to learn how we reduce the customer service and order-taking costs of the drop ship and online retailers.