If 20 years ago somebody described business in sales where the merchant only communicates with clients and receives revenue, it would be considered a utopia. A merchant doesn’t keep any inventory and it is the manufacturer who takes care of the shipping. Who would believe in this business?
Today, however, this business is quite real and growing more and more popular. It’s called dropshipping. A thousand merchants around the world are using this opportunity to grow their profits via online stores or marketplaces. This type of business is considered one of the lowest risk ventures for beginners. Therefore, it is highly popular among newbie sellers who do not want to invest considerable sums into their startup business.
Dropshipping software is what makes such types of businesses operate efficiently, but more on that later.
Why dropshipping business is in need of a special technology
As mentioned above, this business doesn’t involve keeping an inventory for merchants. Instead, they rely on product vendors, who handle both stock and shipping, but remain invisible for the customer. This convenience brings peculiar needs to be satisfied.
First, the merchants and vendors willing to work in dropshipping need a resource to find each other fast and easily. This also means the ability to instantly view the essential information about each other and become partners without any hassle.
Secondly, there is the necessity of very quick and precise communication between a vendor and a merchant that become partners. The sooner the vendor is notified of the order placed and gets paid for it, the sooner the item is shipped and delivered, ensuring customer satisfaction and the proper service level.
Other than that, a merchant needs to track the order statuses and shipping process to be able to answer any questions that a client might ask.
All these processes would be easy to carry out by hand only for slow businesses. But as the order volume grows, things can get hectic and more staff might be required, which leaves some space for human mistake. That’s where automation technology comes in handy. Numerous dropshipping platforms are created to free the rapidly growing number of dropship merchants from routine tasks, save their time and seriously improve efficiency.
However, dropshipping software vendors have a hard time making their product stand out of the crowd of competitors. Offering a decent piece of software with a robust feature set and at a competitive price is easier said than done. So, let’s now see how to expand the circle of potential clients by ensuring all of the advantages of dropshipping and turning its weaknesses into benefits.
Key features of dropshipping business
No inventory on hand. It is one of the major attractions of the business since it seriously cuts down the upfront investments. Also, merchants who don’t spend time on buying and storing items can direct more efforts to marketing and selling more effectively.
Still, this advantage has a hidden pitfall -- merchants need real-time updates on the vendor inventory levels to avoid selling out-of-stock products. It’s best if the changes are reflected automatically on their website or marketplace, with no need to do it manually.
Ability to work with multiple vendors worldwide. Since merchants aren’t limited by the location of their storage facilities, they can pick vendors from various parts of the world. Sometimes they even work with several manufacturers producing the same products. This is to handle the shipping effectively and extend their customer reach.
Yet, in case an order consists of several items from different vendors, it is of primary importance to manage shipping wisely. Good dropshipping software should help merchants pick the best strategy to save shipping costs that can otherwise “eat up” all profit from the sale.
Expanding product range at no risk. It’s an attractive opportunity to grow sales for merchants that have been in the dropshipping business for some time. There’s no need to purchase anything upfront, it’s enough to partner with the manufacturer of the items they would like to sell.
It would be a good idea for dropshipping software to suggest the popular items a merchant might want to start selling. This feature might be most appreciated by those willing to grow their assortment, but clueless as to what else to sell.
Choosing a reliable vendor. Since dropshipping is getting more popular, there appear many wholesalers who sell the items from the same vendors at a higher price than others. This leads to financial losses of a merchant.>
Plus, in case a vendor neglects his duties and fails to provide valid data on the stock level or messes up the shipping, it is the merchant who has to fix the situation. Sometimes it may cost both money and reputation.
Therefore, a dropshipping platform should offer the functionality to sift through the vendors to pick the reliable partner with a good record and selling items at a competitive price.
Integration with other software - dropshipping business frequently requires nothing more than a computer and Internet connection. But in fact, for it to run smoothly, different pieces of software are used, like ecommerce platforms, online marketplaces like Amazon or eBay, ERP, EMS systems, etc.
It’s most convenient to access them from one interface, which is exactly what a dropshipping platform can become. The more integrations it supports, the more merchants would find it a viable solution for their business.
See how your dropshipping software benefits from shopping cart integration
First of all, integration with various shopping carts automatically expands the circle of your potential clients. This is due to the fact that nearly all dropship merchants are using e-Commerce websites as their major business tools. Plus, shopping cart integration gives you an extra competitive advantage, as your software is more likely to be chosen by the merchants using a specific supported shopping cart. Nevertheless, integration is a challenging task.
The first issue is picking a decent number of popular e-Commerce platforms to integrate with (1 or 2 is not enough as they are too different and have different goals and target audiences). Even if the list is ready to go, the biggest challenge is ahead. Getting inside of each particular shopping cart is a painful and time-consuming process since each of them has its own unique way of storing information. It also requires serious financial investments to pay the qualified developers to work on each cart integration.
But there exists a way out. 40+ top shopping cart integrations have already been developed by an online service API2Cart. It provides a unified API to connect your software and the platforms, leaving the integration troubles behind. Learn more about how API2Cart helps your dropshipping business.
It goes without saying that building a decent drop shipping software calls for serious efforts. But once done, it’s not the end of the road - you’ve got to continuously improve your software in order to beat the competitors and win more clients. If this is the case with you, API2Cart can help. Schedule the free call with one of our experts to find out more about your integration opportunities and get your questions answered.