Traditionally, products are distributed by first being shipped from the factory to a supplier, then to a seller, and finally being sold to a customer. In the case of dropshipping, the retailer receives the client requests and delivery information, then transfers these to the supplier. The supplier, in turn, will deliver the items straight to the end consumer.
It may seem that you don’t need inventory management capabilities since you nearly do not have any physical storage. However, dropship inventory management is critically important due to some reasons:
Menu:
1. Dropshipping retailers have to work with multiple vendors
Because you are ordering products from various suppliers, keeping track of the products’ availability is extremely important since the uncertain in-and-out stock of the products could bring an inconvenient experience for the buyers. Therefore, you should look for an ERP solution that can integrate with your wholesaler partners’ software. In this way, you can continuously handle the updated inventory and bypass placing products on the backorder. If your partners don’t want to integrate for some reasons, try to come up with an alternative solution. A suggested one is sending common reports to your business with details about available inventory.
2. Retailers need to maintain visibility of the inventory
Inventory visibility is crucial in dropshipping since you need to know how much stock is available to communicate with your customers. After sending orders’ details to your supplier, it is necessary that you know precisely the process of each order. Inventory management software is helpful by allowing you to check your entire inventory in real-time.
3. Dropship inventory management software will reduce human errors
One of the most significant benefits of starting an ERP program is the reduction of mistakes. When dealing with different suppliers, once in a while your staff can make a mistake and unintentionally pass over/overlook an order. As a result, to maintain your brand’s reputation, it is essential to avoid these mistakes by using a reliable software solution.
