Why Drop Shipping can be More Profitable (and Less Time Consuming)
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?
Here’s how: OPAL is an intelligent, self-driving drop ship and large order fulfillment software solution that brings most of these technologies together into one complete platform, plugs into your existing ERP / Accounting software investment 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 transaction communication, 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.
OPAL also takes advantage of the direct communication 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 from retailers and e-tailers, sends back Acknowledgements, ASNs, Invoices and Product Inventory with no translation or transmission charges regardless of the format required (EDI, API, HTML or JASON) and is 100% compliant with each retailer.
So where do the savings really come from? Just compare the cost of a traditional drop ship order to how OPAL accomplishes the same thing:
Traditional Drop Shipping
2,000 orders worth $20 each
Order processing cost approximately $4 each
Shipping time of 2 days
Labor and Infrastructure cost:
- 8 clerks
- 8 PCs
- 8 Desks
4,000+ EDI Transaction Charges
OPAL Drop Shipping
2,000 orders worth $20 each
Order Processing Cost of 40 cents each
Shipping Time of 2 days
Labor and Infrastructure cost:
- 1 Clerk
- 1 PC
- 1 Desk
Zero EDI Transaction Charges
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?