Consider Drop Shipping!

Monday, April 9th, 2012
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Consider drop shipping to expand your product catalog, draw more traffic to your site and increase your sales.

Drop shipping is an arrangement that allows you to sell products on your website that you do not own or stock in inventory. When you have a drop ship arrangement with a manufacturer or wholesaler, you can list their products on your site without making an investment in inventory, notify them when you get an order, and have them ship the product to your customer. Typically they charge you a reduced price for the product plus shipping, and you get to keep the difference between what you charged your customer for product and shipping, and what the drop shipper charges you.

In many cases, entering into drop ship arrangements with one or more vendors is an excellent way to expand your product offering, which of course results in drawing more traffic to your site and increasing your sales.

Some of the advantages of expanding your product offering with drop-shipped products include:

  •  No capital outlay requirement for inventory.
  •  No requirement for inventory storage space.
  • The ability to “test drive” products to determine what most appeals to your customer base and what is most effective at bringing in new customers, without any capital investment.
  • No worries about complicated and time-consuming fulfillment logistics or inventory management.
  • Increased site traffic, both because you will have more product pages for search engines to index and because you can appeal to a broader spectrum of shoppers with varied needs.                         
  • Incremental revenue generation.

Some things to think about as you set up your drop ship relationships include:

  • Select drop ship products that make sense on your website – they should be related to your core business, and should not dilute your brand identity.
  • Make sure that your drop shipper is reliable, and will fulfill your orders in a timely manner.
  • Work out a system in advance for how the drop shipper will let you know when products are out of stock, how your orders will be transmitted to the drop shipper, who will notify your customer that the product has shipped, how you will update your order management system to reflect the shipped status of the product, along with package tracking info, and how returns will be handled; all of which will be necessary for customer service and business management.
  • Think about how you will calculate shipping for your customers, as each drop shipper may use different methods and charge you different rates.

Nexternal clients can easily manage drop ship arrangements through the automated drop ship function in the Order Management System. In addition to completely automating the order notification process, Nexternal also provides the unique ability to create a distinct shipping calculation table for each drop shipper, so that shipping is calculated accurately for each and every line item in an order.

To learn more about setting up drop shipping in your Nexternal OMS, simply contact your dedicated Account Executive who is always happy to help.


Pamela is a Senior Account Manager at Nexternal and works in the Napa Valley office. She is passionate about helping her clients succeed. With 20 years' experience in the wine industry spearheading business development and marketing for various wineries including her own, plus previous years practicing general business law, Pamela is well qualified to provide the service and guidance to her clients that sets Nexternal apart from other eCommerce providers.