Dropshipping is when an ecommerce store doesn’t keep items in stock and, instead, sources products from a third-party manufacturer or wholesaler who holds the items and ships them as needed. The store owner pays the wholesale price as items are shipped, removing the burden of keeping their own inventory.
This is different from the 3PL model, where the store provides its own inventory to the third-party provider, and different from when a store stores its own inventory.
It makes sense for D2C businesses that own their own manufacturing and want to keep order fulfillment in house. It also makes sense for ecommerce businesses that want minimal france phone number list involvement in the fulfillment process. Essentially, the business forwards shipping details to the manufacturer, who takes over the transaction.
The downside to dropshipping is that it means giving up control of the order process. Additionally, costs (and shipping times) can shoot up quickly when customers are far away from your manufacturing partner’s shipping locations.
Hybrid order fulfillment
Hybrid order fulfillment is any scenario that combines multiple strategies. For example, a company with heavy seasonal sales might keep most order fulfillment in house, but outsource some to a third-party firm during Q4. Alternatively, the company may select high-value or specialty items for dropshipping, while everything else is handled another way.
Best practices and tips for an optimized order fulfillment process
Once you’ve determined a broad direction for your order fulfillment strategy (or identified some top-tier issues with your current process), it’s time to reevaluate and optimize. Use these best practices and tips to tighten up your order fulfillment strategy and further wow your customer base.