The Drop Ship Dilemma

Why we DO NOT drop ship

Polka Dot Whale stocks all items they offer. We do this because we want to ensure that we control everything that can possibly affect our customers. Yet, there are several manufacturers and online retail stores that offer drop-shipping (though they don’t always share this information to their customers!).

When we founded Polka Dot Whale, Natalie and I made a conscious decision not to offer any products that are drop shipped because of the huge risk it poses to our customers. Those of you who aren’t familiar with drop-shipping, it is when a retail store offers a product that ships directly from the manufacturer’s warehouse. Often, the manufacturer offers this to a few (or many) retail stores. The steps are generally:

• The customer places an order with a retail store.

• The retail store takes the order and passes the item and shipping information to the manufacturer’s warehouse.

• The manufacturer then ships the item to the customer.

For a full explanation, wikipedia offers a great review.
http://en.wikipedia.org/wiki/Drop_shipping

The obvious advantages for retail businesses are they are able to offer items without having to stock them. Thus, they can offer sometimes hundreds, if not thousands of items. Suddenly stores see lots of dollar signs:).

Drop shipping also benefits customers by offering them incredible choice of products that otherwise aren’t available many places.  An example of this is that there are many, many online baby stores that currently offer dozens and dozens of diaper bags that they don’t carry themselves.

Yet, there are often several cons/costs that directly affect customers. This is why we have been so weary of offering drop shipped products.  Here are some of the main cons:

It is very difficult for manufacturers to let their drop ship retail stores know accurately what their stock levels are.  In other words, when a manufacturer runs out of stock on one item, it could be several days before they tell all their retail stores that this item is no longer available and not to offer it to their customers.

This causes retail stores to take customer orders that they can’t fulfill.  Obviously, this is an inconvenience that ultimately affects customers, not stores. The usual scenario happens: customer orders a diaper bag; retail store takes order and sends it to manufacturer. Manufacturer processes order and finds out they no longer have item. They send back news (not always) to the store that they can’t ship the item. The retail store then credits the customer back and notifies them that they can’t ship the order. This whole process can at times take well over a week.

The retail store trusts the manufacturer to handle and ship the order in an accurate, timely fashion. So much of customer service is captured in the previous sentence. And, it is often the case when manufacturers are excellent at making products, but not shipping them.

This is largely due to the fact that manufacturers are used to making products in bulk quantities (let’s say 100) and they are used to selling products to stores in other bulk quantities. Using the above example, a manufacturer may ship 40 of one item to store A, 15 to store B, 20 to store C and 25 to store D. Boxing them in bulk and shipping them within few weeks. If the product runs late, no worries, it just means that the store is unable to “sell” them.

Yet, when manufacturers get an order for 1 product going to customer A that needs to be there within days, often problems can arise. There warehouse is stacked with huge bulk shipments and just a small box, well….it’s importance gets lost.

How does the retail store know the item has shipped? Or better yet, how does the customer know the item is on its way? Usually once manufacturers ship the item it takes them several days to inform the store…if then. Retail stores often only contact the manufacturer for shipping information after the customer has asked the store. Again, this process can take days for a response.

How do you handle returns or exchanges?  Often, these products are either non-returnable. Or, the customer has ship the item back to the retailer, who then ships it back to the manufacturer’s warehouse. Of course, costs add up quickly….and these costs are often passed back to the stores customers in general.

All of the above is only the surface reasons why we decided NOT TO offer drop shipping arrangements. We will continue to do so until we find a manufacturer partner that can ensure that all the above is addressed to benefit (and not cost) customers. Currently we are looking at a few such opportunities, but we will absolutely not compromise our customers!! We’ll post shortly with a possible manufacturer shortly.

If any customers have feedback for us, we would welcome their advice!! Please post.

Comments

[Jamie R Lentzner]

I agree with what you are saying a 100% about customers first, I wrote an article that was in Kids Today this month about buyers beware. If you do your research you will find that some of us drop-shippers have a 100% gurantee that it is in stock or we make it to order (we do a large amount of personalization), and we have emails confirming we got the order, with turn around times. We also then send tracking information via email, then again when we invoice the tracking information, the ship date is all there. Our business has been around for 5 years and drop shipping for five years - we take customer service very seriously and it is a shame that other drop-shippers give those of us working so hard a bad name. I hope you find some good drop shippers in the future.

[Janet D]

Well...I just read the post above and felt compelled to comment. I have been a dropship retailer for 10 years and have 6 online retail stores. While what some of what yours saying is true. The few problems I have had with suppliers is mostly due to their negligance. They don't always deliver as promised. Not responding to emails. Not shipping out product as promised. Not keeping their stock up to date. Due to these reasons...I have had to drop suppliers due to their lack of customer service. It is certainly not me or the service I provide to my customer. Therefore, I have to be very careful of the suppliers I choose to buy and sell from IN ORDER TO PROTECT MY CUSTOMERS. If they can't or don't deliver as promised...I move on to find someone more qualified and suited to dropship for me. In return...they earn my business and my sales experience in amount of profit. PLUS WE END UP MAKING A CUSTOMER VERY HAPPY THE END.
If you or your manufacturer are not equipped to offer dropshipping...then that is how you are set up. Whether you make an effort to go into the dropshipping is all up to hard you are willing to work.
Basically, all I want to point out is:
1. There are good dropship retail stores that deliver the same if not better service as we are smaller and more personable.
2. There are good supplier/manufactures that do deliver as promised and who do pass on tracking numbers within 24 hours of accepting the order BECAUSE ALL THEIR CUSTOMERS BIG or SMALL ARE IMPORTANT TO THEM.
3. There are suppliers/manufacturers that do keep their stock up-to-date.
4. And there are suppliers/manufacturers who do back up the quality of their products and do offer returns and/or exchanges in order to make the customers happy...AS WITH MOST BUSINESSES...NOT A HASSLE.

It's all about how hard you want to work to earn someones business. So...dropshipping may be a delimma for you or your manufacturer. But it is hardly mine as a dropship retailer and it certainly isn't a hassle to my suppliers...because they want the business I bring them. And my customers seem very happy to me.

[Jess]

I agree with all your comments here. I am a dropship retailer too. I just started 6 months ago. When I choose a dropshipper, I make sure the products they supply are of quality as it should match up with the price my customers are going to pay. I am on a very tight budget to start a business but I want to. So I decided I should try this out, dropship. I need not stock up inventory as it requires space. I can't afford to rent a space. I need not buy inventory, I don't have enough to do that. I need not have a brick and mortar store and I surely can't afford that, its too expensive. So this is what I think is the best. And YES! Customers are very important and it is my responsibility to keep them happy. So I try my best to provide the best. My sales are very slow to be honest. But I am trying as I must try to see the fruits of my labor. I wish the success of everyone who visits this page.

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