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Is Drop Shipping “Stealing Your Lunch Money”?

Are you a manufacturer / supplier, drop shipping 50 or more orders per day directly to consumers?  Is each order costing you more than 72 cents including EDI and labor cost?  Do you use EDI vendors for data transmission?  Is your order processing capacity limited by your number of staff and the hours in a day?  Do you need to add more staff?  Are manual touches required to process those drop ship orders?

We all know that drop shipping is challenging.  It dramatically increases not only the volume of orders to be processed, but also the speed in which they need to be processed.  The additional cost of processing drop ship orders cuts deeply into profits and revenue is lost to limited order processing capacity.  And, if you are selling to multiple e-commerce platforms, incorrect inventory presentation can lead to under or over selling of product.

If you are like most manufacturers / suppliers, all of this leads to:

•  Lower profitability per SKU,

•  Increased chargebacks,

•  A negative scorecard,

•  Increases in customer complaints,

•  Increases in the number of delayed shipments,

•  Increases in the number of cancelled orders,

•  Difficult inventory tracking and accuracy,

•  And, increases in your processing cost per order.

In 2014, Primetime Petz, a manufacturer / supplier for the pet industry, was frustrated with drop ship order processing: it was taking too long, they were re-keying data, preparing a manual shipping label, downloading the packing slip, manually updating inventory and so on.  Through this pain, OPAL was created as a drop ship platform providing the highest efficiency and lowest cost for suppliers when working with their retail and e-tail customers.

It is the first smart platform that has expanded order processing automation beyond any existing order processing capabilities in the industry.  While the most common companies in this market are EDI providers, they simply cannot adapt to the OPAL model because it is detrimental to their revenue stream.

In short, OPAL makes drop shipping viable, manageable and profitable for manufacturers / suppliers, it eliminates the need for dedicated order processing staff, eliminates EDI data transmission cost, makes order processing capacity unlimited and works for you 24×365.

Why Business SHOULD be More Profitable

Ultimately, every business must deliver product on time at the lowest possible cost and remain profitable.  To do that, however, you need to manage a lot of moving parts from manufacturing, to warehousing, to order processing and shipping – not to mention all of the exceptions that occur and possible, subsequent charge backs.  Plus, you get to pay for all of the EDI documents needed.  At an average of $4.00 per order that’s incredibly expensive all by itself.  

All of these things combined really hurt your business’ profitability.

The first big part of successfully solving this puzzle focuses on a dramatic reduction in order processing time, order processing cost and order errors.  The second big part is eliminating, or at the very least substantially reducing, the cost of EDI in working with your trading partners.   But how do you do that?

Many e-commerce businesses tackle this challenge by chaining multiple software systems together, like an E-Commerce Site, an ERP System, a 3rd Party Shipping System, and an EDI Translation / Transmission solution.  The only issue is that this still requires some degree of human intervention, the parts don’t always work well together and, consequently, they don’t provide the significant cost and error reduction that’s needed for optimum profitability.  

On the other hand, OPAL is an intelligent, self-driving drop ship and large order fulfillment software solution that plugs into these existing software investments and truly automates the entire order process, working 24 hours a day, 7 days a week.  

IN LESS THAN 8 SECONDS, OPAL automates receiving orders from retailers and e-tailers, manages all EDI transactions, processes and invoices orders through a supplier’s ERP and accounting system, and creates packing slips and custom branded 3rd party shipping labels per any retailer’s or e-tailer’s requirements.  Once shipped, it sends back tracking information and invoices to the retailer or e-tailer, as well as tracking packages and sending inventory updates.

Additionally, OPAL takes advantage of the direct EDI links provided by retailers and e-tailers enabling a supplier to process a drop ship order with $0 cost for EDI documents – or an LTL, Full Truck Load or Container order for that matter.  OPAL downloads POs (Document 850) from retailers and e-tailers, sends back Acknowledgements (Document 997), ASNs (Document 856), Invoices (Document 810) and Product Inventory (Document 846) with no EDI charges and is 100% compliant with each retailer. 

So, if you employed OPAL, eliminating the cost for things like EDI document charges, EDI management and troubleshooting labor, order processing labor, reduced order exceptions to less than 5% of your order volume, and accomplished it with a total cost of CENTS rather than DOLLARS, wouldn’t that increase your business’ profitability?