Industry news and updates

Dropshipping: Is it the next big thing?

Many of the top retail brands are turning to dropshipping direct to the consumer from the manufacturer, giving them the flexibility to upscale at peak times

Transalis·26 February 2020

Dropshipping: Is it the next big thing?

Many of the top brands are dropshipping direct from the manufacturer to consumer at peak times. In fact, 88% of retailers say dropshop is inevitable for long-term success.

With today’s Instagram culture awash with celebrity influencers, fashion trends come and go at an ever more dizzying speed.

From box blazers to polka dot midis, colour-changing coats to Stormzy’s slippers, what’s hot one day can be out in the cold the next, and vice versa.

When a new look or accessory starts out, it often comes from nowhere and its lasting influence is difficult to predict.

By the time a retailer has fully stocked up, the craze could easily have moved on.

If you work in retail, you know that everything revolves around keeping the customer happy. The high demand for the next best clothes, jewellery and cosmetics can be a strain on ensuring the correct SKU is always in stock.

When overseeing the operations of the business, it is nigh on impossible to micro-manage every aspect of your company’s shipment policy and yet you must still claim full responsibility if something goes wrong – such as expensively stocking an ‘incorrect’ product.

While trends inevitably come and go, your relationship with your trusted manufacturers and suppliers will always be of paramount importance for ensuring ongoing success.

So how can ‘dropship’ be helpful to you as you go about the management of all those systems and processes you oversee as a retailer?

The essence of dropship

Dropship is really a new fashion itself. In a nutshell, it is a mode of fulfilment where you the retailer don’t design the products, store them, or have control over production.

You simply take the order and relay it to your manufacturer, who ships the goods directly to the consumer.

The model was initially associated with internet entrepreneurs and niche manufacturers who tried it as a way of testing out what e-commerce is like.

Now, some of the world’s best-loved retail brands have introduced dropship to keep up with the rise of online demand.

According to research house Statistica, there was £64.5 billion worth of sales via dropship in the US alone in 2017, 23% of all online sales in that year.

And that trend is growing. Eighty-eight per cent of retailers say dropshop is inevitable for long-term success. At the same time, 84% have improved customer service via dropship.

On the manufacturing side too, 71% of respondents in Statistica’s research say systems integration has improved dropship relationships with retailers.

Bearing down on cost

Dropship offers huge advantages for the retailer including no warehousing costs, the chance to offer a wider product range, and the ability to flex quickly amid demand fluctuations.

When managed properly, a coherent dropship system can be revolutionary to your supply chain and can help you test new products, mitigate risks and manage market fluctuations – all with the peace of mind of knowing that the right orders are going to the right customers at the right time.

One of the most common challenges in achieving a successful retailer-manufacturer dropship relationship is making sure your respective IT systems can speak to each other.

This is where Transalis comes in. We specialise in helping digital supply chains through cloud-managed services. We enable retailers across the world to be in the know on the whereabouts of product and ETAs. That’s because our solutions allow manufacturers and retailers to exchange information swiftly and smoothly.

Why Transalis?

At Transalis, we’re all about providing robust IT solutions that enable 360° real-time insight of stock, orders, invoices and other essential information. With our help, you can reduce costs and avoid inefficient double-keying.

In other words, we are an ideal partner for underpinning dropship success, whatever the sector.

Transalis has bags of experience and skills in helping to install an efficient dropship system which can work accordingly with the sudden and unprecedented emergence of fashion trends.

For more information on Transalis, visit www.transalis.com.

A market report from Transalis

Download the free market report to find out how some of the UK biggest brands are overcoming dropship challenges to speed up deliveries and optimise their supply chain.

Including a case study from simplehuman

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