Guide To Dropshipping Fulfillment: Supply Chain, Order Management, and Returns

Dropshipping fulfillment is when a business doesn’t stock the merchandise they’re selling. This is advantageous as it leads to lower production waste and less liability for business owners. When a customer places an order it’s fulfilled by a third-party supplier. The seller doesn’t have to be involved in the supply chain, but there are some things to keep in mind to manage issues accordingly. The supply chain usually involves a manufacturer, wholesaler, or retailer. As a business owner, your priority should be connecting with a reliable wholesaler if you’re looking to stock your business site.


Dropshipping Benefits

There are many benefits to drop shipping fulfillment, most commonly that you can freely stock products on your website when you locate a supplier. It’s a low-risk way to bring in profit, as you aren’t charged unless a purchase is made. This process can vary depending on where you choose to source merchandise, so it’s important to verify with your supplier. Dropshipping is an easy-to-start business with low overhead and your supplier will handle the fulfillment process. This is a major time saver since you don’t have to worry about packaging, organizing, and sending the order out manually.


Dropshipping Challenges

While it can be amazing that you don’t have to fulfill orders, it’s still important to follow up on your deliveries. If any issues happen on the supplier's end with the order, you’ll have to manage the customer service. An easy way to prevent this is to follow up on every order to assure they’re being prepared, packaged, and shipped in a timely manner. Keep in mind that customers can have a poor experience if the packaging is low quality and the shipping takes weeks longer than expected. It’s better to understand these challenges before you enter the world of dropshipping. Find a trustworthy supplier that has responsive communication and a good customer service rating. This will make it easier to troubleshoot if any problems do arise.


The 4 Steps of the Dropshipping Fulfillment Process

  1. Order is placed

Similar to any other business, when a customer places an order you’ll get a notification. The seller will receive an email with information about the order, and the money will be deposited into their account. As a seller, it’s a good practice to keep track of your order or make a separate file. This helps you stay organized in the future, especially if business starts to pick up.


  1. Seller sends information to the supplier

After the seller receives the information they will need to send the order to the supplier. Some suppliers may have an automatic fulfillment process put in place. Otherwise, you’ll need to send an email to your contact at the wholesaler. They will have your card information to fulfill the wholesale price and shipping cost. As a seller, calculate your profit beforehand so you understand the margin you’ll be receiving.


  1. The supplier fills and ships the order

A professional wholesaler will ship the order as soon as they can. Make sure you understand the average timeline of your supplier. Some offer one-day shipping, whereas others don’t. Although they are fulfilling the order, your brand's information will be on the packaging. Take care of this beforehand so you know you’re sending out a reputable logo and return label. Once your wholesaler fills the order, you will receive a confirmation email as the seller.


  1. The customer is alerted upon shipment

After the above steps are completed, you’ll need to send an email to the customer alerting them of shipment. Many online platforms have a built-in setup for this process to make it easier for the seller. After the order is shipped and the customer is notified, double-check that your funds are accurate. Your wholesaler should be paid, and the remaining revenue is your profit. You shouldn’t have any problems at this point unless the customer has concerns or needs a return.


How To Handle Dropshipping Returns

Returns are a problem many dropshipping sellers have to tackle. It can be difficult to manage returns with a third-party supplier. At this point, it’s important to debate what your top priorities are. There are a few options for handling returns, and there’s flexibility to choose the approach that best suits your business.


  • No returns: The return policy you choose depends on the level of customer service commitment you’re willing to make. Some people decide to do a no-return or exchange policy. If you don’t offer returns for your products, this needs to be well known to the customer. This can be a bad business strategy if your products don’t match the level of quality you guarantee. It’s important to weigh the pros and cons to decide what’s best for you. A no return policy may lead to unhappy customers or bad reviews. However, if presented correctly, it might just limit hassle for you and the supplier.


  • Full refunds: Some drop-shippers want to maintain their customer's trust and security while purchasing. A full refund policy is where you guarantee reimbursement to the customer without them having to return to product. The seller would need to cover the lost profit. This can be a successful business strategy to convert new prospective buyers. However, you want to be wary of people taking advantage of your policy. If your product is high quality, you probably won't run into any issues.


  • Negotiate a return policy with the supplier: If you want to return items through a normal process, without losing funds, negotiate a deal with your supplier. Every wholesaler will handle and manage returns differently. This should be organized before your start running your business to minimize any issues. In this situation, you would request a return number from your supplier. Have the customer mail the product back to that address. Once the wholesaler receives the product, they will reimburse you the cost. Now you can pay the customer back in full.

These are the basics to start understanding drop shipping fulfillment. The process should be simple if you locate a reliable wholesaler, and supply quality products to your customers. Remember to create a clear plan ahead of time so you can handle potential issues professionally.


Are you looking for wholesale suppliers for your business? Reach out to us here at LogoZen. Our products range from home decor, kitchen, and serveware, to pet supplies, and fashion. Everything is ethically made and handcrafted from natural materials.


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