Inbound Logistics | May 2022


Omnichannel Commerce & Drop Shipping Fulfillment in the Retail Industry

Q What is drop shipping? A Drop shipping is the process of selling product and passing the sales order along to a third-party who then fulfills and ships the order to the consumer. The third-party logistics (3PL) provider fulfills the order on behalf of their client who sold their product on a third-party marketplace. Goods are often stocked at the 3PL’s warehouse and shipped direct to the consumer, cutting out intermediary steps. Q What should you consider in offering a drop shipping solution for clients? A Implementing a drop shipping solution comes with its share of challenges for a 3PL provider, as these types of orders differ from a standard parcel shipment. Here’s what to consider. • Order Acceptance. Orders have to be able to be accepted from many dif- ferent sources and translated into a “language” that both your WMS and team understand. • Quality & Branding Guidelines. Client branding requirements must be upheld and maintained with every order that is fulfilled. These guidelines are maintained and updated appropri- ately by the seller of the goods. • Labeling for Distribution. Labeling on drop shipments varies for a number of reasons. Employing a WMS which is able to store these requirements and print the applicable paperwork is key.

• Collaboration & Cost Savings. Drop shipping was built as a result of col- laboration in the supply chain. There is an opportunity to realize and share potential cost savings with those clos- est to you in the supply chain process. Q What are the benefits of utilizing a 3PL for drop shipping? A A 3PL has a foundation in nimbleness, responding to the needs of their customers and the greater industry. Below are a few foundational benefits to utilizing a 3PL. • Flexibility. At the core of every 3PL provider is the need to remain agile to the evolving needs of the industry and their client base. As your busi- ness needs grow, your 3PL is poised to evolve with you. • Knowledge. A 3PL’s experience and expertise in the industry have equipped their team with the knowl- edge and skill set to deliver the solutions to meet your business needs. • Technical Capabilities. A 3PL pro- vider has a WMS in place to handle the volume of orders that currently enter their warehouse for fulfillment. The WMS also has the capabilities to hold any branding, labeling, and packaging requirements. • Brand Representation. Ensuring that your brand is represented cohesively from order placement to fulfillment to delivery, is of upmost importance to a 3PL provider.

Ryan Robertson Vice President, Retail & Transportation Solutions MD Logistics 317-838-8900

32 Inbound Logistics • May 2022

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