September 1, 2010, 12:00 AM

Goods to Go

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With either the licensed or SaaS version, drop-shippers can access Dropship Manager either through a web browser to exchange documents with retailers or set up automated file transfers over the web with retailers' order management systems. There is also a per-vendor fee, which some retailers including Wine Country and The Shopping Channel choose to cover to build their base of drop-ship vendors. VendorNet has more than 16,000 drop-ship vendors already integrated with its drop-shipping application, and it takes about two weeks to connect new ones, the company says.

Testing vendors

While an application like Dropship Manager can help manage a growing drop-shipping strategy, including through reports on vendors' order fulfillment rates and other performance metrics, there are many other steps retailers take to ensure drop shippers deliver as expected.

Shea and his staff will have items shipped to their homes from drop-ship vendors to test their delivery times and the quality of their products; they also visit key vendors' facilities and check their financial operating status each year through public financial statements or Dun & Bradstreet reports on private companies.

Wine Country also takes several steps to ensure it gets preferred attention from vendors of popular items. The ability to quickly forward orders in high volumes through the VendorNet system is a big help, but Wine Country will also promise to play up key vendors' products on its web pages and in its print catalogs. "That immediately gets their attention," Shea says.

With an effective drop-ship strategy in place, including effective systems for exchanging data with suppliers, retailers can expand their product offerings and sales without taking the risk of making the wrong move when ordering inventory.

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