How can you improve dropshipping processes in ecommerce? Two words – EDI systems

The turning point

As the pandemic continues to limit the amount of brick-and-mortar shopping, threatening to break the virtuous economic cycle, more and more companies are making ecommerce their primary objective. Trends such as ecommerce acceleration and consumers shifting their purchasing online are becoming increasingly apparent.

No matter their size or industry, hundreds of companies around the world are launching ecommerce platforms to sell their products online, and their number keeps growing by the minute. It is not only about buying food, clothing, or electronics anymore. These days, one can get themselves a car without leaving their home. Plus, the car can be delivered to a specific location, if needed. Now, that's convenient.

Single goal, different approaches

Talking about online shopping, we also need to understand how companies (those that are successful at it) execute ecommerce transactions. Ultimately, we can identify two main models of how orders can be handled. In this article, the first will be called the Classic Order Fulfillment Method, while the second one will be Dropshipping. The main differences between the two adverts are who is the owner of products, as well as how those products are prepared for delivery and shipped to end customers.

In the classic order fulfillment model, the goods are owned by the Seller and, in many cases, are shipped directly from the Seller's warehouse. In other words, to execute an order, the Seller buys the goods, stores them in its warehouse, and ships them to customers when ordered.

As for the dropshipping model, here, the Seller is selling goods provided by the Supplier. Thus, the main idea of Dropshipping is to enable the delivery of goods ordered by the Customer directly from the Supplier's location. We can also define dropshipping as an order fulfillment method that allows companies to reduce the costs associated with transport and eliminate the need for storage.

In a nutshell, a typical Dropshipping process looks like this:

1. First, the end consumer places an order via an ecommerce platform (e.g. an ecommerce website);
2. Then, the Seller forwards that order to the Supplier;
3. The Supplier later confirms whether it can fulfill the order and informs the Seller on dispatch details;
4. Next, the Seller provides the end consumer with information regarding the order and its shipment;
5.  Lastly, the Supplier delivers products to the end consumer.

Improving the process with the help of EDI

In the dropshipping model, the order fulfilment process is quite complex, involving various sets of data that need to be exchanged between multiple parties (sellers, suppliers, LSPs/Carriers, and end customers). Not to mention that carrying out order fulfillment operations manually is a cumbersome, error-prone practice.

By today's standards, the whole process can be automated, meaning we can improve the efficiency with the help of Electronic Data Interchange. Just take a closer look at the examples of EDI transactions that can be introduced as part of the dropshipping process:

• Inventory Report - the Supplier can inform a seller about inventory levels of offered products (product availability information to be presented on an ecommerce website);
• Purchase Order - generated by the Seller, based on the transaction executed by the ultimate Customer's on an ecommerce website, and sent to the Supplier to execute the fulfillment process;
• Order response - the Supplier's confirmation that a given Purchase Order was accepted and will be executed (or it was rejected and will not be fulfiled);
• Dispatch Advice - with the use of this message, the Supplier can indicate the number of goods to be delivered, as well as other shipping information such as the estimated date and time of delivery, dispatch number, delivery note number, transport ID, Carrier Track URL, and more.

So, what's the solution?

Having 25 years of experience in developing high-quality systems and services for business automation, Comarch's IT engineers took on the task of creating a modern, cutting-edge electronic data interchange solution. The result is Comarch EDI – a cloud-based B2B platform that enables dynamic and reliable data exchange between all trading partners in traditional supply chain and ecommerce (including dropshipping). Designed to help any company improve its business efficiency, this product is fully compliant with the latest global standards & regulations.

Our product incorporates various emerging technologies such as artificial intelligence, machine learning, blockchain, and cloud to help companies achieve better business results and reduce document handling costs.

Moreover, it enables companies to send and receive dozens of electronic message types converted to many different formats, the platform has frequently been acknowledged for being both a highly practical and cost-effective IT product. It can be easily integrated with your internal IT systems or used as a Web solution. Despite which form is chosen it will facilitate the entire trade life cycle – from placing an order, through the shipment, to the actual payment.

If you want to learn more about Comarch EDI and how it supports the dropshipping process, check out the new Comarch Case Study about their project for LaRedoute. Click HERE to download for free.

About Tomasz Spluszka

About Comarch