How to handle back order issues with drop shipping?

[forgotten_4580]

Ran into some serious backlog last holiday season. For obvious reasons, I’d like to avoid that, but it seems like a losing battle with drop shipping. Suggestions?

[webrobot]

Completely understand the frustration and terror that is holiday back orders. First and foremost, you want to have a firm grasp of your inventory at all times. Any drop shipper worth his salt- that is, any shipper worth your time- should be able to provide an up-to-date inventory accounting any time you ask for one. Drop shippers depend on your ability to keep your customers happy and so any reliable supplier will do as little to get in your way as possible, and will do anything he can to make it easy on you.

I’d recommend a few tips in general-

● Work with the supplier to keep a solid, order-to-order handle on the available inventory. Know what’s available, and pull items from your offerings when supply gets low. You should be able to integrate inventory with your management program(s), and get alerts when things enter a predetermined “danger zone”.

● Diversify! Major watchword here. The more suppliers you have, the less likely you’ll have to worry about back orders. Don’t go crazy and get more than you can manage, but you definitely want backup if you have need. As you know, there’ll always be need.

● If an item has a history of being a hot seller during the season, make a few backup orders to yourself before the season. Should any of your suppliers fall through, you’ll be able to fulfill crisis orders yourself.

To be honest, the secret to avoiding back orders is just vigilance and forethought. Keep an eye on your stock, which you should be doing anyway, and you’ll come out of the holidays smelling like a rose. The only thing you should leave to your suppliers is order fulfillment. Otherwise, drop shipping requires the same attention and time as more traditional supply solutions.

Keep in mind also that issues with orders, supply, whatever is sort of inevitable. Everything tends toward entropy, and business is no different, especially retail after Black Friday! When the worst happens, just remember to be open, honest, and accommodating to the customer and you should at least be able to keep your reputation solid.

It’s entirely possible that you’ll lose a customer if she buys something you essentially didn’t have to sell, but she won’t be able to say you didn’t do everything in your power to prevent and rectify the situation. If the worst outcome is that you lose that one sale and that one customer, you’re doing pretty good still. When a sale falls through, I’m quick with a refund, and even offer a discount on the next order, sense the issue is entirely on my end.

[forgotten_4580]

Except it isn’t entirely on my end, it’s the supplier’s end. Shouldn’t the supplier be the one eating the cost on this?

[webrobot]

You’ve got to get out of that mindset post-haste. Remember, the customer couldn’t care less whether you’re using drop shipping or a traditional supply chain. If it’s on the supplier’s end, it is on your end. Also, unless the supplier showed the item in stock soon before the order, it’s actually your fault. Especially if you’ve used multiple suppliers for the same products, the likelihood of a back order and being misinformed by all of your suppliers is next to zero.

[darkmarauder]

Good call webrobot, harsh but definitely true.