Dropshipping is a supply chain management strategy that allows companies to effectively reduce costs and at the initial stage does not require a large investment. In order for dropshipping to really work, it’s important to choose the right business development strategy. In the traditional retail model, the seller invests in inventory, storage and labor. Dropshipping allows you to sell products without buying them in advance.
The dropshipper has no real store, he does all his business online. The buyer purchases goods from his site, and the order is sent by the supplier directly from his warehouse. At first glance, e-commerce does not require much effort. This is partly true if the store has few items or operates in a mono-niche. But if your online business grows, it becomes difficult to manage. You need to fill product pages, change prices, and exclude items that are out of the seller’s stock. Do advertising and promotion of the entire site. This is not a one-hour job.
What is automated dropshipping?
Usually, the manufacturer sells products through its dealer network, which works directly with wholesalers or retailers. There can be quite a few of them. With each order the stock decreases. Situations where the product offered by the retailer is already sold out or bought out by other retailers are unfortunately not uncommon.
If a dropshipper has multiple suppliers, it can’t operate effectively without business automation.
Automated Dropshipping is a technology for automating dropshipping processes with special software. Instead of manual control the whole work process from product selection to order fulfillment and customer service is set up and carried out automatically. At the same time, vendor software must be integrated with the dropshipping platform.
Pros and cons of automated dropshipping
Checking long tables manually on a daily basis, constant contact with the supplier, filling in the product page today and finding out tomorrow that it is no longer in stock. All this is exhausting, the dropshipper loses speed and loses customers. The automation of dropshipping completely changes the entire sales process. All tedious and tedious tasks are performed by a kind of business autopilot, it clearly performs all programmed tasks and does not make mistakes, which are often due to inattention. The dropshipper can now make decisions based on quality and “fresh” data.
By automating the process, entrepreneurs reduce their operating costs because they don’t need to hire additional staff to manage the process.
Automated dropshipping. Pros:
- Increases the efficiency of all business processes
- increases accuracy and eliminates errors
- optimizes the processes of product selection, order fulfillment and customer service
- allows you to significantly reduce the time needed to manage your direct delivery business
- quality and timeliness of data
- reduces operating costs
- allows you to focus on other aspects of your business.
Connecting and using the software is a cost to the dropshipper. This needs to be considered when calculating overhead and profit calculations. The software will need to be updated, and the chosen dropshipping automation program will have to be carefully studied, to understand all its tools, the technology of the resource. At the initial stage, this can be a problem.
Unfortunately, no application or software can eliminate the human factor, guarantee honesty and integrity. The supplier is in charge of updating the data, and the dropshipper depends on his diligence and promptness. He can’t control the products, shipping, or how the data is updated.
Automated dropshipping. Minuses:
- Reduced profit margin
- some basic technical knowledge and time to learn the software is required
- no control over the quality of data completion by the supplier when synchronizing the software
- supplier may limit customization and branding for customer orders
- Dependence on working conditions and vendor position
Dropshipping automation platform
Create your dropshipping website with Tilda’s simple and reliable builder. Paying for a year of hosting and connecting Google Analytics, you get an effective promotion tool. Now let’s talk about what you need to consider when choosing a dropshipping automation platform.
1. order processing automation
Order processing is one of the most popular and sought-after automation options that simplifies the routine of transferring data and information. The client pays for the order on the merchant’s site, and after that all the information and details of the order are sent to the dropship provider. He sends the product. Or starts its production (if deadlines allow), and then delivers the goods to the customer in the required quantity.
Well-known platforms such as Oberlo, Step Link and Shopify allow you to automate your work with multiple suppliers.
The Step Link dropshipping automation platform enables near real-time processing and tracking of a database of 17900 products from 860 system-checked suppliers. When the platform is connected, the dropshipper can take advantage of the automatic order processing option and connect the minute-by-minute information update feature.
For 58% of online shoppers, delivery terms and speed become the final argument in choosing a store. It is automation that reduces delays in data transfer. Allows for optimized supply chains and faster delivery of selected goods to customers.
2. Synchronization of information and data
A well-designed automation platform allows you to integrate data from suppliers’ sites and synchronize information. It helps deliver orders from the merchant’s site to the supplier’s personal account and accounting system. The retailer doesn’t need to duplicate information and send it to the supplier via messenger or email.
All data about the quantity of the product, its current price, photos and characteristics are automatically pulled up on the vendor’s site, on the product pages. But if the vendors do not regularly change the information about the availability of goods in stock or price changes, do not send updated price lists and restrict access to the general system – it becomes a huge problem for the dropshipper. In this case, he needs a parser that allows him to remotely copy information from the supplier’s site.
There are several platforms on the market that are popular with information and data synchronization. They allow you to import goods from sites such as AliExpress, Amazon, Alibaba. The best synchronization tool of the Step Link platform has great features, which:
- Automatically uploads product titles, images, features and descriptions
- integrates data and orders
- allows you to store inventory information without downloading files
- integrates parser functionality for data collection from the supplier’s website
- allows you to upload finished product feeds in API, XML, CSV, EDI formats.
3. Actual prices and availability of goods
When investing into promotion of his business a dropshipper invests into his future: his name and reputation. Any failure in the supply of goods – quality or return issues. To eliminate the risk of selling items that are out of stock, it is important to automate the process of obtaining data on the availability of goods in stock. Which ones, and how many?
The software of the Step Link platform can be easily synchronized with the resources of the counterparties, allowing real-time visibility of the availability of any given item in the warehouse of the suppliers. The retailer can see which suppliers have a lot of stock, and which have less.
4. Optimize pricing
Since wholesale supplier prices are subject to change, it is important for dropshipper to understand at what price and with what markup it is profitable to offer the goods today in its internet-shop. It is important not to forget and have time: to change the prices on the site, close the pages with sold-out goods. The situation can change within an hour. For example, goods are delivered to the supplier’s warehouse, but their price has already changed. In order not to sell at a loss, or to avoid announcing to the customer that the product is more expensive after the payment, it is necessary to constantly monitor and update the prices on the site. If the seller has several suppliers, and there are dozens of items on the site, you can’t do it effectively manually. Mistakes and inattention can cost a lot of money. A dissatisfied customer may ask for a refund.
The Step Link Dropshipping Automation Platform and its “price settings” module allow you to automate the process of changing the markup. In order to prevent the retailer from incurring losses, the parameters of minimum and maximum profitability are set when setting up this function, and the approximation of percentage price changes is adjusted. Synchronization simplifies the work: when connected to suppliers’ sites, prices in the dropshipper’s online store change automatically.
5. Order tracking
In 2023, a successful online store cannot exist without customer feedback. 87% of users want to be notified about the status of their order. Automatically track its online progress. The customer’s opinion is important to the business, so it’s imperative to automate the order status monitoring function. Similarly, the software should allow the dropshipper to be aware of any delays in the delivery of goods to the customer. Connecting the dropshipper’s site to the Step Link Platform allows the dropshipper to automatically update the current order status and track the supply chain from the manufacturer.