How to Select a Drop Shipping Technology

By Logicbroker | May 18, 2020

Developing drop shipping capabilities offers serious benefits for your business, but it can still seem like a daunting task. Your business systems need to be hooked in, you have to manage your drop shipping relationships and getting involved with some of the largest marketplaces and retailers out there requires technical expertise.

Fundamentally, however, these challenges are technical ones; to solve them, you’ll want to adopt a drop shipping technology. Only nobody wants to wind up with a solution that trades one set of problems for another.

When evaluating software solutions to support your drop shipping operation, here’s what you need to look for.

Look for a flexible platform

When we think of the most important feature of a drop shipping operation, the first word to come to mind should be “flexibility.” After all, retailers and brands often first look to drop ship programs to expand their assortment or their presence in different marketplaces — being limited by an inflexible solution is counterproductive.

To be flexible, drop shipping technology needs to support a variety of ways to share commerce documentation, including EDI and APIs.

For suppliers

Many retailers, especially those with a large customer base, have strict guidelines in place regarding how they accept commerce documentation. EDI has been around since the 60s and has been heavily adopted throughout the industry, but more and more retailers are using APIs to accept files from their drop shippers. To get your products on different marketplaces like Amazon Vendor Central, Walmart Marketplace, Wayfair and others, you’ll need a solution that can both map to EDI and offer a flexible API.

For retailers

Because EDI has been around for so long, many retailers default to its use — however, EDI raises a supplier’s barrier to entry, and it doesn’t offer great visibility into your data after it’s been transmitted. APIs are more appealing to vendors due to their ease of use, but developing one can be challenging. Even if you have an existing API, you can still make things easier for your suppliers. Adopting a drop shipping technology to sit between your and suppliers’ systems is more straightforward.

Prioritize onboarding

Implementing drop shipping technology is supposed to make life easier. But if you’re working with multiple retailers or suppliers, then migrating to a new system can make it harder.

Drop shipping technology that’s designed to be flexible with APIs, and EDI will make onboarding easier in part, but you’ll also want to ask the team behind your technology about how much support they’ll provide when onboarding, especially if you have existing partners with unique needs.

You’ll also want to determine whether implementing your drop shipping technology will require significant coding — the more development time it takes to make a solution function for your business, the longer it will take to get up and running.

Stay compliant

It’s not the most thrilling subject, but ensuring that your drop shipping solution complies with different countries’ and states’ laws and regulations will ensure you can sell in as many regions as possible. That, after all, is the major benefit of selling through a digital storefront.

If you use a third party to process your customer’s data — like a drop shipping technology provider — then you’re still liable for how that third party handles your customers’ data. You’ll want to talk to the team behind your drop shipping solution to ensure that they’re in compliance with laws like the GDPR and CCPA.

Make sure you can test everything before going live

Using a staging environment to test your integrations is crucial, but not every marketplace offers a sandbox. To ensure that your purchase orders, invoices, shipping notices and inventory management systems work as intended, it’s a good idea to adopt a drop shipping solution that provides a staging environment.

Knowing that everything works exactly as intended beforehand is key to maintaining your business’ reputation. By winging it, you’ll risk lost orders, poor customer experience and damage to your brand should something go wrong.

Future-proof your business with a cloud-based solution

By now, one would expect companies in a globalized industry like retail to offer their services over the cloud. Unfortunately, some providers still rely on on-site servers or a hybrid solution.

Using cloud-based technology, however, means that you’ll be able to access your drop shipping operations from anywhere, receive regular updates and avoid any disruptions to your service. Like robust integration capabilities, cloud-based technology is fundamentally about giving your business maximum flexibility.

Find the right solution for you

These characteristics should be top of mind for any business evaluating a drop shipping technology, but it’s important to remember that your business is unique. There may be specific features that your organization needs to see in any drop shipping technology for it to be truly advantageous. If you’re considering whether Logicbroker could work for you, get in touch with one of our experts.

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