How to Make the Most Out of Dropship

shutterstock_397306339

Dropship is a service that allows you to integrate RQ directly with your accessory suppliers. This enables your sales associates to increase their accessory attachment rates, whether the item is in-stock or not! If you’re not familiar with Dropship, you may want to check out the basic details in our recent blog, How They Work: Defining Endless Aisle, Dropship & RQ.

Dropship is a great way to introduce new profits to your business. Often times companies will introduce new technologies or programs to their business and expect that it will work on it’s own.  But where we’ve seen the most success is when the program is properly managed. Below are three tips on how you can make Dropship work for you!

#1. Support Your Sales Staff

The reality is sales associates already have a lot to do and even more to remember. When implementing new processes, it’s important to support them. You really must prioritize ways to maximize adoption at the store level right down to your sales associates as they are key stakeholders in making the program a success.

  • Staff Training. Ensure your training manual and onboarding processes include training materials and speak to associates about why it benefits them. Hint: Dropship means more commission! Have fun and get creative on sharing tips and tricks — why not make your own “How To” videos?

  • Walk a Day in Their Shoes. Try getting on the floor with your sales staff and showing them first-hand how to sell using Dropship or understand where the gaps are in upselling.

  • Words Matter. Create trigger words for sales associates to remember Dropship. For example, every time a customer says “Amazon” or “eBay,” create a rule that the sales associate MUST bring up Dropship. Rather than saying “we can special order that,” experiment with saying things such as “we’ve got a virtual product catalog and can get that ordered for you with free shipping” or “let me see if that’s available from our warehouse.”

  • Repetition Works. Remind your staff about new programs frequently. Perhaps you have daily huddles where you can discuss drop shipping or adjust the background of computer screens to keep it top of mind. Even place printouts on bulletin boards or in staff areas. Don’t forget to also mention it during sales associate or store manager performance reviews. Making Dropship a metric allows employees to see how well they’re doing and where they can improve.

  • Friendly Competition. Have fun with the program and your sales staff will too. Try out giving bonuses to top performers or to your best performing stores. You could even work with vendors or brands on co-promotions or incentive programs and prizes.

 

#2. Monitor Your Metrics

What Peter Drucker said is true; “what gets measured, gets managed.” It’s pertinent to remember to make Dropship a focus immediately right after launch. Above and beyond that, it’s important to pay attention to how it’s performing for you! Make sure you’re taking advantage of the sales opportunities this system can offer.

  • Assign Roles & Accountabilities. Decide who is responsible for running Dropship reports at your company and how often they should be doing so. When it comes to employees who own these duties, we’ve seen a large mix of Company Owners, Inventory, Operations, and IT roles. Whoever the person is, it’s typically important they are at the corporate level and are in a position to share the information out with relevant stakeholders. Perhaps the reports get shared with all store managers each month. They can then work with their sales associates, set up contests, and implement reward programs to ensure usability.

  • What Metrics? When it comes to analytics, there are a number of different angles you can look at. This all depends on what your company’s key metrics or performance indicators are. Common metrics to look at would be top and bottom performing products, locations, and employees. You will also want to understand your total Dropship sales, costs, and profit. Perhaps you can even compare your different vendors to ensure you have the best product mix.

  • What Reports? If you are an iQmetrix client, you can use your RQ Product Detail report and run for your Dropship SKUs to see all of the above information. Or if you are a BI user you also have a canned report available and can dive into the raw data to create reports and automatically email them out to employees on a regular basis.
  • Reconciliation. Okay, this may not be exactly considered a metric, but it’s also important to run your Dropship sales reports and compare them against your vendor invoices to make sure everything was shipped and charged accurately.

 

#3. Intelligent Inventory

Don't forget that inventory is just money sitting around in a different form. Dropship allows you to get a little more creative with your inventory strategy, giving you better control over your cost-of-goods on hand.

  • More Inventory! It’s a balancing act. I’ve played the inventory game before and came to understand a lot of times inventory levels are based on guesswork, making assumptions, and evaluating your own personal opinions on what new items to bring in. With Dropship, you remove that guesswork without adding the risk! By monitoring the items that sell well with Dropship, you can decide to bring these top-selling products that wouldn’t normally stock before in-store; giving the customer exactly what they’re looking for.

  • Or Less. On the flipside, you may decide to carry less inventory altogether because you have the Dropship option. You don’t need cases, screen protectors, and phone chargers for outdated models. Items that aren’t moving as quickly can move to being Dropship only, accessories that are doing well with Dropship perhaps don’t need to be in-store at all. For example, some retailers have chosen to carry fewer low-end cell phone cases as they move well with Dropship.

  • High-End Products. By watching your inventory, you may also decide to bring in more high-end items that are new to your inventory line-up and that have a higher margin. You could also choose to carry fewer of these exclusive products in-store because of the cost of inventory – a drone might come in multiple colors so carry one for customers to see-touch-feel but then can order what one they like via Dropship. To increase the consumer power, you can also add Endless Aisle touchscreens. This allows your sales associates and customers to see your high-end offerings easily, even if they aren’t in-stock, and review all product details before making a decision.

  • Refunds. It’s also a good idea to allow inventory refunds to get your customers back in-store and to ensure you’re creating great experiences. Not only this, having shoppers back in-store makes for a new sales opportunity—meaning a higher exchange or repurchase rate than if an inventory refund was not an option. If your return rates on a particular product are really high, remove that item from your Dropship library as an inventory option. Then, work with brands and vendors where possible to RMA product back as you typically would.

 

Dropship truly is a game-changing business opportunity, especially when properly managed. Check out our case study on how one of our clients was able to achieve exponential sales growth with Dropship and Endless Aisle.

Read the Case Study

Shutterstock / Uber Images