The Internet has revolutionized shopping. Customers can now purchase whatever they'd like with a simple click of a button or tap of the finger. Most purchases now come from online retailers rather than brick-and-mortar stores. While buyers are happier than ever, traditional retailers are suffering - they've lost 25% of operating earnings as a percent of sales due to meteoric online growth.
E-commerce giants like Amazon may be threatening every business under the sun, but retailers are quickly adapting. Many have already embraced online shopping and tailored their companies to suit an emerging market, but the savviest retailers are combining drop shipping with third-party logistics (also known as '3PL'). In simpler terms, the retailer gets a third-party company to manufacture and ship the goods to the customer.
Embracing Drop Shopping
Say that a customer buys an item from a retailer. The store pays a third-party manufacturer to create and ship the item directly to the customer's house. The retailer and manufacturer both receive money and the customer gets fast delivery for a reasonable price.
The main advantage of this model is that retailers will no longer need to keep inventory in a costly warehouse which requires transportation and storage fees. As a result, businesses can efficiently and quickly scale by adding new suppliers & product, all which help win new customer business. Drop shipping also allows traditional companies that have been leaning on their brick-and-mortar sales to truly leverage e-commerce without sinking years on build-out and merchandising.
Retailers can source 3PLs and drop shippers close to the customer's location, which saves money on delivery time and fees. Shoppers demand rapid fulfillment and often won't have the patience for delays or long wait periods. Happy customers lead to high retention and sales, both of which are great for business.
One company that is revolutionizing e-commerce is Zebit - a unique online marketplace with zero physical goods. The company realized that scaling their business required establishing flexible communication protocols with vendors. Zebit soon partnered with Logicbroker whose adaptable, cloud-based platform and extensive network helped onboard new suppliers, expand their product collection, and scale their business efficiently. Logicbroker's automated processes and software integration streamlined vendor relations, allowing engineers to focus more on their work.
"Over the past year, we have experienced tremendous growth," said Colby Ross, Zebit's Director of Product Management. "We have grown our business 10x, much due to our partnership with Logicbroker and the drop ship vendors they work with."
Evolution is Critical to Survivability
Businesses must evolve to meet evolving technology and demands lest they want to go the way of Borders and Blockbuster. Embracing new methods will help companies cut costs, increase efficiency, and remain relevant while those sticking to legacy processes will unfortunately be unable to keep pace.
"Too many traditional retailers are clinging to eCommerce fulfillment processes that worked a decade ago," said George Heudorfer, VP Digital Commerce at Logicbroker. "Forward-thinking retailers are eliminating the headaches of internal order fulfillment by combining drop ship vendors with a third-party logistics network."
In today's sharing economy, third-party reliance is critical, especially for car rides, customer service, lodging, and even pet-sitting. It's time that stores did the same.
For an informative journey on the retail matters at hand, eTail West is February 26-March 01, 2018 in Palm Springs, CA this year. The conference will cover omni-channel commerce strategies, how to succeed in digital, and how to harness emerging tech, and more.