If you’re running an ecommerce store in 2019, you might have considered dropshipping. Dropshipping is the practice of selling inventory that you don’t actually have on hand. There are unique challenges involved in dropshipping that don’t come alone with traditional shipping practices, mainly because you need to rely on your vendors to send the products purchased by your customers.
When you get into the details of dropshipping, it all sounds very complicated – but it doesn’t actually need to be. Ever heard of EDI, more formally known as electronic data interchange? EDI is the practice of B2B communication via electronic means (and no, we’re not talking about email). EDI is much more structured than that and it is completely automated.
EDI comes in many forms, but for ecommerce stores hoping to take advantage of dropshipping, it is time to look for a drop ship EDI program.
Before we can cover the advantages of EDI for your dropshipping business, let’s first talk about the specific benefits of dropshipping itself. According to a company called DiCentral, dropshipping allows you to “ship directly to consumers by leveraging your dropship vendor community with the same conﬁdence as shipping from your own warehouse.”
This means you never have to deal with the actual products you’re selling. As long as you make solid connections with your vendors, you can ship just about anything from anywhere to anyone. You don’t have to pay a cent to purchase your inventory at a wholesale rate before selling it to the consumer for the retail price. On top of this, you won’t have to pay for a storage solution for storing your inventory. Instead, it will be shipped directly from the vendor or manufacturer to your customer.
Potential Problems with Dropshipping
This all sounds great and all, but there are certainly some issues you could experience with dropshipping if you don’t go about it properly. There must be a greater level of organization involved and solid communication with your vendors and third-party sellers. If you don’t have a way to receive real-time updates from your vendors, then you might not have knowledge of what’s in stock vs out of stock.
How EDI Can Help
When you invest in an EDI solution for your dropshipping business, there’s not more questions like “Where’s my order?” from your customer base. All of your company data will be synced with the relevant information from your vendors and third-party sellers. This information is often synced in real-time, so as soon as a vendor runs out of an item you’ll be notified to mark that item as “out of stock”.
The beauty of dropshipping, though, is that you can have multiple vendors selling the same products. When one vendor is out of stock of a customer favorite, you should be able to sell it from someone else. You’ll also have plenty of time to find another vendor before the situation gets too dire since you’ll have complete visibility of inventory lists. When you see that something is running low, you’ll have time to organize another solution for your customers.