Challenges in Dropshipping Business

Dropshipping business is undoubtedly one of the most outstanding things brought about by the Internet and our new lifestyle. This new business model allows start-ups to run e-commerce with little resources. Here, we will discuss the seven most common challenges related to dropshipping business and how to overcome them:

Find a reliable supplier

The first major challenge most companies face in dropshipping is to find reliable suppliers. There are many manufacturers and sourcing agencies that can be your suppliers, but you need to maintain a detailed relationship with them on the same page.

You can easily find suppliers in almost any niche market of your choice. There are many resources to help you search. Make sure that the supplier you choose can meet your needs. Consider factors such as supplier fees, minimum orders, professional industry knowledge, and scalability.

Dropshipping-problems丨ChinaBrands丨ChinaDivision
Dropshipping-problems丨ChinaBrands丨ChinaDivision

out of stock

When you start your dropshipping business, you will discover that the warehouse may be out of stock. It is one of the most common problems, and it is more common in certain product hot seasons. If you work with a very large manufacturer and order fulfilment company, you may not experience a shortage. If a product is out of stock, you must notify the customer as soon as possible, even if you find another supplier. It is recommended to cooperate with multiple suppliers.

Delay in order processing

When customers buy items from your website, they expect their order to be processed as quickly as possible. Most customers don’t understand that, in most cases, the process of processing orders is not completely under your control.

In some cases, orders that have already been placed with manufacturers will be delayed. When customers wait for the tracking code, this delay may create some tension with them. Don’t let it linger. If you haven’t received any news from the supplier within 24 hours after placing the order, please contact them to solve the problem. When these situations occur, you will at least know why the order has not been processed and how long you have to wait. Pass information to customers to appease them.

Ship to the wrong address

As embarrassing as it sounds, some orders have been shipped to the wrong or non-existent address. This is another major challenge you may face as an e-commerce entrepreneur. The best way to solve this problem is to carefully check each order address sent to the supplier.

Product return

This is something you can’t escape in e-commerce. In most cases, this is never your fault, because third parties are always involved in direct shipping. You cannot make all the rules here. Suppliers handle returns in different ways, so you must find a way to communicate clearly with customers. Your return policy is clearly stated on your website. Make all necessary efforts to make your order fulfilment proceed smoothly.

How Does Warehouse Automation Reduce Costs?

Warehouse automation can help improve accuracy, efficiency and reliability, and save labour costs. Most warehouse operations need to pay high labour costs. According to inbound logistics data, 65% of the warehouse’s operating budget belongs to labour costs. The annual expenditure for a warehouse with 100 employees is nearly $4 million. With this in mind, it makes sense for logistics companies to consider using automated warehouse processes.

How does warehouse automation work?

Warehouse automation works by automatically collecting data and controlling inventory. The warehouse control system uses the necessary hardware equipment and software systems to coordinate all operations. Here is how to achieve:

Warehouse-automation-丨Avidbots丨ChinaDivision
Warehouse-automation丨Avidbots丨ChinaDivision

1. Barcode label:

Barcode labels are the basis of warehouse automation. Warehouses track items through them. Barcode labels can accurately capture data and eliminate errors in tracking or shipping items. The use of barcodes helps inventory tracking, restocking planning, improving picking efficiency, traffic optimization, and reducing stock-outs.

2. Inventory Management System (IMS):

Check inventory levels, product information, and storage locations in real-time, thereby providing companies with high-level inventory control.

3. Automatic storage and retrieval system (AS/RS):

AS/RS consists of machines that move up and down on optimized aisles to retrieve or place items. They provide improved inventory control and item tracking. They can also ensure that the warehouse is better arranged vertically and horizontally, thereby saving inventory.

The key elements of AS/RS include storage and retrieval machines, automated guided vehicles (AGV), frame structure, and warehouse control system software (WCS). All these components work together to receive, place, pick up, pack, and ship items along an optimized route.

4. Hardware equipment:

Use the necessary hardware to help retrieve data from barcode labels and monitor activities, otherwise, warehouse automation will not be possible. Commonly used devices are portable data terminals, stationary computers, bar code scanners, rugged tablet computers, and label printers.

How to Find Wholesale Suppliers?

Are you struggling to find a suitable wholesale supplier?

Did you know that there are more than 330 thousand wholesale suppliers in the world? And the top 50 suppliers generate only 25% of industry revenue.

The difficulty of finding a suitable wholesale supplier can be imagined!

DONT WORRY! This article will provide some ways to inspire you. These tips can not only help you find the right wholesale supplier but also help you clear your mind.

How-to-Find-Wholesale-Suppliers丨ChinaDivision
How-to-Find-Wholesale-Suppliers丨ChinaDivision

Contact the manufacturer

This is the most straightforward and easy way for us to find wholesale suppliers. If you have a product you want to ship, you can call the manufacturer and ask it to provide a list of wholesale distributors. Then you can contact these wholesalers to inquire about the availability of dropshipping services and information about opening an account.

Since most wholesalers ship products from various manufacturers, this strategy will enable you to quickly source select products in the niche markets you are exploring. After several contacts with leading manufacturers, you will be able to quickly find excellent wholesalers in this market.

Use Oberlo

Oberlo can help you easily import supplier products directly into Shopify and ship them directly to your customers.

  • Import products from suppliers
  • Fulfill orders automatically
  • Inventory and price auto-updates
  • Product customization
  • Pricing automation

Use Google search

Google search can find more high-quality suppliers, but there are some rules to keep in mind:

  • You’d better search extensively. The performance of wholesalers in marketing and promotion is not optimistic, and they will definitely not be among the best in the search results for “Wholesale Supplier for Product X”. This means that you may need to look at many search results (perhaps hundreds) to find the wholesaler’s website.
  • Don’t draw conclusions through their website. Some wholesalers are now notorious for using the 90s style website design. Therefore, although a good website may indicate a good supplier in some cases, many legitimate wholesalers have a recommended homepage. Don’t let bad design scare you away.
  • Use a lot of keyword modifiers. Wholesalers do not perform extensive SEO to ensure that you find their website, so you may need to try various search queries. Don’t just stop at “[product] wholesalers”. Try to use modifiers such as “distributor”, “dealer”, “bulk”, “warehouse” and “supplier”.

Attend trade fairs

Trade fairs allow you to establish contacts with all major manufacturers and wholesalers. This is a good idea to establish contacts and investigate your products and suppliers. But this method is only effective when you have selected market segments and/or products, and it is not feasible for everyone. However, if you have the time and money to attend, it is a good way to get to know the manufacturers and suppliers in the market.

What Are the Types of Warehouses? (Part Ⅱ)

In the first part of our guide to all types of warehouses, we focused on each type of warehouse. In the second part, we will explore more types of warehouses, especially those that have emerged due to the recent demand for more complex warehousing services.

Types-of-Warehouses丨Totaljobs丨ChinaDivision
Types-of-Warehouses丨Totaljobs丨ChinaDivision

What Are The Different Types of Warehouses?

Distribution center

The convenience of entry and exit of the distribution center is very strong. This kind of center is essentially a place where goods are purchased from different suppliers in the distribution system and quickly transferred to each customer.

Distribution centers usually have a relatively large space, almost twice the size of traditional warehouses, and can accommodate multiple supply chain businesses. Retailers’ large inventory can be released through distribution centers to save holding costs.

Government warehouse

Government warehouses, as the name suggests, these warehouses are directly owned and controlled by the government. These warehouses can not only meet the government’s own needs but also can be leased to enterprises for use. But if the company cannot pay the rent on time, the government will have the right to dispose of the goods to offset the rent.

Consolidated warehouse

The consolidated warehouse receives the goods from different suppliers and packs them into larger goods and then transports them to buyers.

Generally speaking, a consolidated warehouse is a very economical way of order fulfillment, especially suitable for small e-commerce companies or start-ups. Most of these warehouses are located in superior geographical locations to meet the needs of urban areas with strict logistics.

Climate-controlled warehouse

To meet the storage needs of different products, the climate-controlled warehouse ensures the integrity of the goods by keeping the temperature within a certain range.

Items that require special handling conditions (such as vaccines, medicines, dairy products, artwork, electronic products, etc.) should be stored in a climate-controlled warehouse. This type of warehouse will follow strict quality control procedures to ensure excellent environmental quality.

What Are the Types of Warehouses? (Part Ⅰ)

Warehouse, is defined as a place where an enterprise chooses to store or accumulate goods due to business development needs. Different types of warehouses have completely different operation methods and use. Understanding these classifications will help you choose to lease or purchase after choosing the right warehouse.

What-Are-the-Types-of-Warehouses丨ChinaDivision
What Are the Types of Warehouses?丨ChinaDivision

What Are The Different Types of Warehouses?

Private warehouse

Private warehouses are usually owned and managed by large manufacturers or suppliers and used for their own production needs. Examples of private warehouses:

  • Warehouses built by farmers/producers near their fields, farms, and workplaces
  • Warehouses owned and managed by wholesalers or retailers near the sales centre to quickly supplement sales demand
  • Warehouses built by manufacturers near its production plant to store raw materials needed for production
  • Retailer rented warehouses
  • Retailers may have several regional warehouses to meet sales needs
  • Warehouses owned/rented by wholesalers for storing and distributing products

The existence of private warehouses is a base for owners to consider using the best scope of use to maintain their long-term strategic advantages.

Public warehouse

Public warehouses are usually owned by the government or semi-government agencies. Private companies that cannot own their warehouses can meet their storage needs by paying rent.

If a private company wants to build a public warehouse, it must obtain a license issued by the government. These warehouses are very suitable for easy loading and unloading of goods, flexible and cost-effective rent, and can store a variety of products.

Bonded Storage

The tax declaration warehouse is owned and managed by the government or a private organization with a government license. Applicable to importers, the imported goods in the bonded warehouse do not need to pay any customs duties and consumption taxes before release, which reduces the business burden for importers or exporters for a while.

Automated warehouse

Automated warehouses use many automation technologies, such as AI, robotics, order tracking software, and so on.

This type of warehouse still requires human participation, but mainly depends on computer technology and equipment. At present, many large companies are working to improve the automation of warehouses to reduce the probability of human error.

Cooperative warehouse

As can be seen from the name, this type of warehouse is owned and managed by a cooperative. The Cooperative Warehouse Association provides members with storage services for goods that only charge a small rent. Its basic purpose is to help its members, not to make a profit.

Advantages of Simplifying the E-Commerce Supply Chain

Does your e-commerce supply chain encounter the following situations:

  • Delivery is not on time
  • Slow adjustment of out of stock
  • Slow product packaging and delivery speed
  • Long shipping time

Although you may not have encountered these situations, are you willing to take the time to optimize your e-commerce supply chain to achieve greater sales growth?

What is an e-commerce supply chain?

E-commerce supply chain has a series of logistics processes, including product raw material production, manufacturing, warehousing, inventory management, order fulfillment, and last-mile delivery. The ultimate goal is to provide your customers with high-quality products and good customer experience. Every link in the supply chain is critical and depends on reliable partners.

What is e-commerce supply chain management?

E-commerce supply chain management refers to the logistics process of supervising product inventory, from manufacturing to order transportation. A highly optimized supply chain is highly optimized to help reduce costs and increase productivity, which may affect profitability and customer satisfaction.

E-Commerce Supply Chain丨The Leadership Network丨ChinaDividision
E-Commerce Supply Chain丨The Leadership Network丨ChinaDividision

Four advantages of simplifying the e-commerce supply chain

A simplified e-commerce supply chain can not only improve internal operations but also improve the customer experience. The four advantages of simplifying the e-commerce supply chain are listed below:

Higher transportation efficiency

Any delays in the supply chain can wait for improvement, especially transportation. The two main factors affecting transportation time include:

  • The location of each link is different (manufacturer, warehouse, customer)
  • Different transportation methods (air, sea, freight, etc.)

The right method of transportation can bring you a competitive advantage to win more customers, and even provide services similar to Amazon.

Cost-effective freight

An important point in optimizing the e-commerce supply chain is to find cost-effective freight to reduce transportation costs. Use appropriate packaging for the weight and size of the product, split the inventory geographically were cost-effective, and ask the carrier for shipping discounts based on the order volume, etc.

Accurate inventory management

Inventory management is a key link in the e-commerce supply chain. By optimizing inventory levels, you can:

  • Avoid unnecessary stock outs and discontinuations
  • Forecast future demand
  • Simplify inventory assessment

Methods to solve common e-commerce inventory challenges include: setting reorder points based on historical order data and future forecasts, regularly reviewing inventory, and implementing inventory management software.

Better customer experience

Simplifying the e-commerce supply chain ensures that you can provide the best customer experience for every order. By optimizing the supply chain, transportation costs are reduced, delivery time is shortened and the risk of human error due to improper chain operation is reduced.

As your e-commerce supply chain becomes stronger, you can focus on improving customer communication by tracking orders in real-time to provide them with the latest information from processing orders to delivery.

5 Ways to Reduce Product Returns

Facilitating order payment may be one of the happiest things for e-commerce sellers, but there is a worrying hidden danger: product returns.

In this era of fast and free shipping and returns, no matter whether the products can meet customer expectations, they will face the risk of being returned. In this article, we will provide you with five ways to reduce product returns.

Why reduce product returns? In short, it increased the company’s operating costs and caused financial pressure. Product returns will cause the following risks to the cost of e-commerce:

  • Refund cost: The company loses profit opportunities and may lose customers.
  • Transportation costs: Companies that provide free transportation and return goods to take care of transportation costs to invest in their customers.
  • Product disposal costs: returned products must be inspected and then resold, liquidated, or discarded. If the products are liquidated, the company will lose money because these products must be sold at a price lower than the original value. In the worst case, the project will be discarded and no cost can be recovered.

Fortunately, there are ways to reduce product returns.

Reduce-Product-Returns-RepricerExpress-ChinaDivision
Reduce-Product-Returns-RepricerExpress-ChinaDivision

An Important Way to Reduce Product Returns

Accurate and clear product pictures

Display the appearance of the product with maximum clarity and accuracy. A 360-degree product is an ideal way to provide your customers with a view from all angles, especially to showcase furniture or technical products.

But if you cannot provide this type of image, try to provide an image that can zoom in to see close-up details. Make sure that the image you provide can be displayed clearly on the mobile device because the mobile terminal often has more order opportunities than the desktop computer.

Use video to showcase products

Although pictures are useful, videos can make your product display more clearly, especially for product categories with a high customer return rate, such as electronics, clothing, etc. Clothing videos show the upper body effects of models; household appliances or electronic products show how the products are used.

Value customer feedback

Customer reviews or feedback on the product is the best way to better understand your product and how to improve it. Comments can provide you with ideas to better describe the product or discover product problems. You should not avoid this but encourage customer feedback. Your return and exchange form should provide the customer’s description of the problem, such as the product size is different from expected or not as shown in the advertisement, etc. Secondly, you can also encourage customers to leave comments by using discount coupons or free gifts.

Correct packaging

The correct packaging method is a key factor in avoiding returns, as they help prevent items from being damaged or broken. Please make sure that the packaging materials you use can protect the product from external shocks. In addition, please ensure that the product information on the package is consistent with the packaged product.

Clear delivery time limit

When customers browse the product page, please indicate the approximate delivery time of the order. This detail should be paid more attention to products that need to be customized. Please also pay attention to the logistics on weekends and holidays. Provide customers with the ability to select a specific delivery date, even if customers need to pay additional shipping costs can also improve customer experience.

Although offering free returns can help improve the customer experience, if you find that the number of returns is unacceptable, try using the methods described above to reduce returns.

Five Tips for Optimizing Warehouse Operation

Warehouse operations occupy an important position in e-commerce logistics, but if there is an error in the processing of inventory data or there is a problem with the back-end warehouse logistics, the warehouse operation may quickly collapse.

Moving the product from the warehouse to the door of the customer has almost no room for error, which affects your company’s reputation and revenue. Warehouse operation optimization plans can improve efficiency, space, and resource utilization through automation and careful planning, and deliver them to customers accurately, thereby improving customer satisfaction and experience.

Understand product movement speed

Product movement speed refers to the speed of merchandise sales. Certain products in each warehouse will move faster during special seasons or during major promotions.

At this time, the layout of the warehouse should allow these products to move faster and more conveniently. Placing them in an easy-to-extract position can speed up the warehouse operation. One solution is to place them as close as possible to the packaging area.

Warehouse-Operation丨ChinaDivision
Warehouse-Operation丨ChinaDivision

Minimize human error

The lower the degree of human error, the higher the efficiency of the warehouse operation. Repeated automated marking of all products in inventory is very important. If this process is a human operation, errors will occur no matter how many trainings employees receive.

Robot technology

The warehouse that invests in robotics has obvious benefits in reducing expenses and increasing efficiency.

Decades ago, the scope of technology in warehouse operations was limited to robotic arms that could move or lift heavy objects in accordance with human instructions. Today, technology can take on more tasks.

The following are some of the machines commonly found in warehouses today:

  • Automatic guided vehicle
  • Autonomous robot
  • pilot-less airplane
  • Automated storage and retrieval system (AS/RS)

The use of these innovative tools has some positive effects including higher customer satisfaction, fewer delivery process errors, and becoming a means of attracting customers.

How to Reduce Supply Chain Costs?

One of the best ways to reasonably control company expenditures is to reduce supply chain costs. Fortunately, this goal can be achieved in some simple ways.

However, what you need to understand when you start with this part is where the key points are because the correct reduction with a clear understanding will bring the greatest return in the future.

Next, this article will make some suggestions for reducing supply chain costs and increasing profits.

Reduce-Supply-Chain-Costs丨TASK丨ChinaDivision
Reduce-Supply-Chain-Costs丨TASK丨ChinaDivision

1. Cut unnecessary space costs

Making full use of the space you have will save you money every day. As we all know, renting a warehouse to store materials requires daily rent, which will be a lot of money for a long time. Evaluate the utilization rate of your current warehouse space and find a warehouse that is more in line with actual needs that can save some money.

2. Process automation

Warehouse automation is not only a fashion trend, but it can also help you achieve the purpose of reducing supply chain costs. Ask professionals to provide assessment and advice on how to implement automation.

3. Make timely adjustments to customer needs

One of the ways to reduce supply chain costs is to make timely adjustments to customer needs. As the season changes, you will find that customer needs are constantly changing. You can follow these changes to make more accurate sales policies.

4. Minimize product damage rate

The improvement of the product packaging level will help reduce the probability of damage to the product during transportation. Make sure that the staff responsible for this area pack your products correctly to minimize breakage rates.

Warehouse Management System(WMS): How to Choose the Right one?

How to choose the right warehouse management system(WMS)? The right solution can help your company achieve improved order fulfilment, increased inventory visibility, automated data collection, and more.

The warehouse management system(WMS) can quickly process data and assist in the movement of goods in the warehouse. This article will give you some suggestions for optimizing warehouse operations.

Warehouse-Management-System(WMS)-ChinaDivision
Warehouse-Management-System(WMS)-ChinaDivision

The benefits of deploying a warehouse management system (WMS) are as follows:

  • Efficient and effective labor management
  • Inventory visibility and traceability
  • Accurate inventory counting
  • Fewer picking errors
  • Fewer returns
  • Accurate reports
  • Improve response speed
  • Remote data visibility
  • Automatic replenishment
  • Improved customer service
  • Minimize paperwork

Before implementing WMS, you need to make sure that your company’s future business benefits are objective. This system requires capital injection and involves operating costs. The main cost is to support the entire warehouse team and senior management to use their expertise, enthusiasm, and commitment to ensure the normal and correct use of the warehouse system and regular optimization.

WMS can help you maximize the realization of automated warehouse operations. It is not just a warehouse control system and a data collection tool. When you decide to incorporate WMS, the following seven suggestions can help you choose the best solution for warehouse operations.

WMS-ChinaDivision
WMS-ChinaDivision

1. Calculate the return on investment (ROI)

The process of continuous verification is very important because it can help you set a reasonable budget for the project and focus your energy on key parts.

2. Decision procedure

Modern WMS is highly configurable (usually configured by the end-user) and can adapt to any type of warehouse environment.

3. Do due diligence on your existing system

Regardless of whether your company’s current enterprise resource plan or business system already has WMS, you need to make a full investigation of the existing system.

4. Evaluate the internal development capabilities of each supplier

Due to the advertising and marketing nature of the WMS market, few vendors’ internal developments are feasible. A typical WMS supplier may amortize the ongoing development costs of more than 100 customers. If the overall requirement is particularly strong, or the need to integrate existing internal systems, in-house development is sometimes feasible.

5. Request information

First, prepare a short request for information (RFI) document, which describes your business, future business direction, warehouse, and warehouse plan, and outlines the goals achieved by WMS. If necessary, you can use the services of a consultant to help you.

In RFI, ask the supplier about the budgeted cost and implementation time frame. Ask for supplier information, including:

  • Company History
  • Financial history and status
  • Number of sites using their current WMS products
  • Owner of the intellectual property and source code of WMS
  • Customer list
  • Daily rates and support fees
  • Scope of support
  • Development plan
  • Track record

Then send this RFI to 6 to 10 subjects. Focus on suppliers with experience in your market. A WMS provider who has no experience in this field is unlikely to have the features and expertise to help you. Focus on vendors that have track records linked to any business or ERP system you are running.

6. Assess suppliers

Select three to five WMS vendors. Price is not the main evaluation criterion at this stage, but it can be used to exclude suppliers who will exceed your budget. Meeting with suppliers will help you understand their professionalism, their ability to face your needs, and their ability to answer your questions.

7. Make a decision

Choose the best WMS supplier for your warehouse.