A web-based drop-shipping system helps a retailer cut cost and expand inventory at the same time.Web and catalog retailer Wine Country Gift Baskets is trying to expand its range of inventory to include items not warehoused in its own facilities.
With the Dropship Manager software system deployed, Wine Country is benefited by reducing operational costs as the application, developed by VendorNet, is able to transmit documents electronically and reconcile orders and invoices automatically on a daily basis.
General manager Bill Shea says, before the system is adopted, it could take weeks to reconcile drop-shipping documents even with a staff dedicated to this process. More than that, the retailer has to pack slips, ship labels to vendors, and follow up with e-mails, faxes and phone calls to confirm if the vendors had received and shipped the orders.
And now, once Wine Country receives an instant shipping confirmation through the system, a shipment alert with a link to the carrier will be automatically sent to the consumer for the consumer to track the shipment status. The application saves the retailer from time-consuming documents processing and error-prone manual data entry can be avoided.
With the use of the web-based application, Shea says a previous retailer he worked for balanced the cost of adopting the system in six months by reducing its operational costs.
To maximize the profits from drop shippers, Wine Country will purchase a minimum inventory from each vendor given that the vendor agrees to produce a level of safety stocks to cover additional demand if necessary, says Shea.
