Dropshipping in 2021 & It's challenges!!

Dropshipping is a retail strategy where retailers don’t directly manage and distribute their product inventories. Instead, when an order is received, information such as product number, delivery address, and order date are sent by the company to the supplier to fulfill the order on its behalf.

Reasons for Increased Dropshipping Demand in 2021:

1. First, the shutdowns in March, April, and beyond played havoc with e-commerce supply chains. In some cases, this forced brands & wholesale businesses to invest in fulfillment infrastructure.
2. Second, e-commerce demand spiked, forcing some retailers that had previously done their own fulfillment to turn to suppliers.
3. Third, the shutdowns forced many retailers into bankruptcy, including JCPenney, Neiman Marcus, Lord & Taylor, GNC, and more. Many of these businesses kept selling online whilst in bankruptcy because of drop shipping. Their financial situation made it difficult to order truckloads of products, but, with drop shipping, they could continue.

Standard Online Supply Chain v/s Dropshipping :

Primary Dropshipping Challenges :

1. Service Level Agreement (SLA) Breaches - Having multiple sales channels as part of your Omni strategy often leads to overlooked/breached SLAs. This results in a bad consumer experience and an unhappy retailer/marketplace. Dropshipping in 2021 demands the usage of robust solutions like that of “Assure” which not only ensures the adherence of the SLAs but also ensures that Right products are shipped to the Right Order.
2. Inventory Transparency - An extremely important requirement for the new age brands while opting for Dropshipping is to have a “single view of Inventory” for all their sales channels simultaneously. Having segregated inventory for respective channels often leads to unfulfilled orders and hence a bad consumer experience.
3. Product Returns - Returns come with a lot of supply chain confusion and losses. The new age tools makes the return process extremely simple yet comprehensive. Progressive tools like “Assure”  not only have the option to select the specific reasons incase of a QC Fail return product but also have the capabilities to capture 10 images of the returned product to facilitate the reconciliation with the retailers/marketplaces.