Drop Ship Vendor (DSV)
Wholesaling but not as you know it
What is Drop Ship Vendor?
DSV is an interesting concept in which you are delivering what is a wholesale order direct to the retailers end consumer via a sale on the retailers website.
DSV can compliment a wholesale relationship with a retailer. As the supplier you are able to sell your core wholesale products into the retailer. You can then extend your offering by supporting a DSV trading relationship, if this is available.
Two different behaviours
Wholesale and DSV should be working on the wholesale price agreed between the two businesses.
The big difference is that instead of delivering bulk orders to the retailers Distribution Centre (DC) the DSV order is a "single" pick in the suppliers DC that is delivered directly to the end consumer.
A DSV order will impact on minimum order quantities plus you might have to support additional paperwork/labels (I would negotiate on this aspect) within the suppliers DC adding additional time to process a DSV order.
DSV business transactions
As DSV is an eCommerce transaction these are taking place through the evening and at weekends.
The solution you need to deploy to support this activity needs to work 24/7 so that the end consumer gets the positive experience that they desire.
1) Product details
Product details will need to be provided to the retailer in the agreed formats. Hopefully this information is readily available with the supplier, however this is a new behaviour in a wholesale relationship.
2) Inventory files
To ensure that products are being sold that are in stock an inventory file need to be sent. This is now where automation is key so that accurate inventory files are sent throughout the day, night and at weekends. As a retailer or a supplier you do not want to advise that an order can not be fulfilled.
3) Orders
When orders are generated on the retailers website the order should be processed through to the supplier so that the order can be acknowledged and processed through to the DC to be picked, packed and shipped.
The stock holding needs to be updated to reflect the sale for when the inventory file is next sent out.
4) Order acknowledgement
This is not seen as an important transactional file. I beg to disagree as this transaction:
a) Confirms receipt of the order
b) Confirms the order can be fulfilled
c) Provides the suppliers sales order number
By automating this process an order can be acknowledged on the retailers website outside of office hours.
5) Fulfillment/dispatch advice
This file confirms shipment of the order and can provide tracking details allowing the end consumer track their order. By automating this process you remove the possibility of keying errors, in particular with tracking numbers.
6) Invoicing
DSV can generate many orders and therefore many invoices. This is where EDI Invoicing aids both businesses as the ERP can generate these and send these to the retailer.
7) The DC processes
DSV can seriously impact the DC operations if the retailer requests that certain paperwork is sent out with the order along with specific labels. The joy that is brand ownership.
However compromise will work and if there is an existing process supporting eCommerce orders being paced directly the retailer will accept the supplier labels. This will need to be discussed.
8) ERP processing
A DSV order should technically never be rejected as this is an eCommerce order which should be fulfilled. These orders should be processed through to the DC operation, if the operation works at weekends, to be picked, packed and shipped.
This activity should be working throughout the day, night and at the weekends.
Disparate file formats and connections
Over the years I have worked on a number of developments that supported the following transactional file formats and connections:
1) EDI Orders and EDI Invoice with a VAN connection also including a simple CSV file format plus sFTP connection
2) EDI file format and AS2 connection
3) An XML file format and SOAP API connection
4) An XML file format and sFTP connection
5) An XML file format and an AS2 connection
6) A simple CSV file format and sFTP connection
What I hope to highlight is the complexity of a DSV development and open up discussions.
Please contact me if you want further information.