With retailers handling more online orders, it’s important to ensure customers have access to the products they need and can get items as quickly as possible. To do this successfully, it’s not as simple as doing more online, which will erode margin unless there is a fundamental shift away from costly internal fulfilment.
Major retailers are now seeing the benefits of using drop shipping as part of their product range expansion strategies. Drop shipping provides a clear way to build a more resilient supply chain, increase product SKUs and win new customers.
Drop ship has long been valued as a way to extend range whilst mitigating logistics handling costs and becoming more capital efficient. To do it successfully, we advise keeping these tips in mind:
Define a range expansion strategy.
Analyse your purchase data and define cohorts of customers you are under-performing with. Find products that will appeal to the cohorts you want to win. Ensure that all products that you add align with your brand promise.
Identify the outlier products.
Some products will be more problematic to store in or ship from your own warehouses. Find these products and consider using drop shipping as a fulfilment method.
Ensure a consistent experience.
Establish tight guidelines that align with your brand promise for third–party sellers so that customers are presented with a consistent journey from purchase to delivery.
For the past 20 years, CommerceHub has been progressively perfecting the art of drop shipping, delivering powerful capabilities and ecommerce expertise, to ensure that drop ship delivers an exceptional brand experience for our customers. We can help you leverage drop ship to increase revenues and strategically expand your product range.
To learn more, download Internet Retailing’s white paper: The Range Challenge: Offering More for Less.