The right suppliers are crucial for the success of your dropshipping business. While this statement is true for almost any business out there, in dropshipping, the quality and reliability of your suppliers is part of your brand image.
That’s because you, as the seller, have absolutely no control over the products you’re selling or the delivery process. Once a customer clicks ‘buy now’ on your site, the order (and your brand reputation) is in the hands of the supplier.
Furthermore, due to the supply chain crisis that will extend in 2022, the control isn’t in the hands of the supplier either. In fact, experts warn brands to expect a drop in sales due to backordered items and prolonged waiting times.
This is why retailers, and dropshippers in particular, need a solid network of reliable suppliers at their disposal. You need to always have a backup of your backup, in case things go terribly wrong.
However, there’s a dark side to having multiple suppliers as a small business (which most dropshippers are). The sheer effort needed to manage all the orders, keep track of delivery, and maintain a good relationship with multiple suppliers is downright exhausting.
Luckily, there are things you can do to improve things and avoid hiring an army of managers and assistants. Here are a few ideas:
#1: Dropship Automation
A software tool that keeps track of orders and automates the entire process is definitely not something you can ignore once your business starts to grow and the number of suppliers and customers increase!
However, it’s important to find the right timing. Automation doesn’t work if you don’t have enough data and knowledge on how to build and personalize the processes that keep the business running.
Therefore, it’s important to try dropship automation once your brand starts to get more noticed in the market.
Automation helps you save time and money and allows you to focus on other business areas that can’t be automated. However, it’s important to find a software that molds your needs.
For instance, in the world of dropshipping, you will need software that’s designed for personalization, order tracking, and is capable of integrating with several third-party systems.
#2: Set Up Proper Communication Channels
Just like you have several communication channels for your customers, you should have some for your suppliers. It’s important to keep in touch with them, talk with their sales representatives, and let them know if your needs are about to change in the near future.
Keep in mind that behind the brand and the marketing, you are still dealing with people. Their interest is to sell as much as possible in a short period of time (just like you, by the way) using the resources at their disposal.
For this, keep your messages short, easy to understand, and detail-oriented to avoid any communication mistakes.
Also, when mistakes happen (it’s almost impossible at times) analyze the situation and their response. If they take responsibility and work to solve the problem, you can trust they will be reliable suppliers and you should include them in your network of quality collaborators.
#3: Proper Inventory Management
But wait, dropshippers don’t have inventory. What’s this about?
True, a dropshipping business doesn’t have to deal with inventory and delivery. However, stock availability is a factor that deeply influences your brand and your relationship with customers. After all, who wants to receive an order the supplier can’t honor because the item is out of stock?
That’s why it’s crucial to have a data synchronization system so your virtual inventory matches your supplier’s
This is usually done by the automation software, but it can be done using a dedicated software as well. The idea is to have a background process that takes out out-of-stock items from your site the moment your supplier’s stock runs out.
If you work with multiple suppliers that sport the same item, you could have the system check every supplier’s inventory before they list an item as being out-of-stock. However, in this case you have to set up a unique SKU system to keep track of each item’s provenance and delivery path.
Key Takeaway
The right way to manage multiple suppliers is to have an efficient order management system that synchronizes with the inventory management and even helps set up the right pricing strategy for optimized profits.