If you’ve operated an online business for any length of time, you’ve probably at least heard the term “drop shipping.” Drop shipping is the process of moving goods directly from manufacturer to customer without involving intermediate parties. Many merchants favor drop shipping for the purposes of decreasing overhead, providing quicker shipping options for customers, and avoiding the messy parts of tracking on-hand inventory. Your Volusion store has all the necessary features to support this business model, should you decide it’s the right one for you. So without further ado, here are some tips for getting started with drop shipping!
Picking Your Product PartnerOver the last decade, the prevalence of drop shipping has increased to meet the demands of ecommerce websites. That means there are many providers available for you to choose from today—but choosing well requires some research. Changing drop shippers can be a hassle once business is booming, so you’ll want to choose a provider that will meet some or all of your distribution needs for the foreseeable future.
The first question to answer is: what do you want to sell? What is your niche? It’s important to find a drop shipper that carries the items you want to provide to your customers, at good quality and at feasible price for your profit margin. It’s also a good idea to look at a drop shipper’s website, business reviews, and other clients. You can see what your competitors and allies in the business world are saying about a specific provider’s ease of use, reliability, potential complications, and more. Volusion’s Partners page lists a few drop shipping companies that we trust and have worked with in the past, but you are by no means limited to using those for your Volusion store.
Once you’ve found a good drop shipping candidate, contact them. You’ll want to have your business information ready: things like your Federal EIN, recent and yearly sales numbers, expected volume, and a good idea of your target market. Prepare a list of questions to ask the drop shipper, as well: ask about their return policy, whether they have a minimum order requirement, and if they’ll provide product images to use on your website. Once you’ve settled on a specific provider, your first order with them should be a smaller one. Have it shipped directly to you, so you can check the quality and make sure there aren’t any surprises in transit (many drop shippers do this “test run” as standard practice).
Volusion Functions and FeaturesWithin your Volusion store, there are two ways to set up drop shipping for your products: regular drop shipping and auto drop shipping. Both involve creating vendors and vendor rules for your products, as well as enabling drop shipping when creating the products themselves. Your store will generate POs, or “purchase orders”, that tell your vendor (the drop shipper) what to ship, how much of it, and where. The only real difference between the two is that standard drop shipping requires you to create these purchase orders and send them to your vendor manually, while auto drop shipping will automatically send your vendor one PO for each customer order that comes through your storefront.
Setting up vendors is a snap. In your store’s Admin Area, go to Inventory > Vendors, click Add, and enter (at a minimum) the required values based on what your drop shipper provided.
Once this is done, you can create vendor rules for any products you’ll be drop shipping. On each product’s editing page, scroll to the very last section, titled Vendor Rules. Here, you can create a rule by entering the Vendor ID for a vendor (drop shipper) you created, the Vendor Part Number (whatever product identifier you want to show on the PO, such as the Product Code or a specific SKU number the drop shipper requires), a Minimum Quantity (usually 1), and a Price (whatever you pay the vendor for the item, rather than what your customers pay). Note that each of these fields are required for the vendor rule to work correctly.
Now that your vendors and vendor rules are created, you can go to Inventory > Purchase Orders any time you need to generate a purchase order for your vendor! You’ll be able to choose from your vendors (if you’ve created more than one), select products and quantities to request, specify where these products will be sent, and even process received items (if you created the purchase order for the purpose of restocking your own inventory). Keep in mind that payment for these purchase orders is handled between you and the vendor, not through your Volusion store. The prices in this section are for record-keeping purposes only.
Customer ConsiderationsAs you get underway with your drop shipping integration, a little forethought goes a long way toward anticipating your customers’ needs. What will you do when they request a return? Do your items include any complications for the drop shipping process (modifications or customizations made to products before shipping, specialized packaging, add-ons)? Does your inventory model require a change in your workflow—how you track stock or sales, for example? Have you made promises on your website or to third parties (like Google Trusted Stores) about your shipping timeline?
There are numerous resources online that can guide you through solutions to these and other questions regarding drop shipping. Tackling them early gives you some extra time to address any complications that arise, making less stress for you and happier customers in the long run!