Dealing with Drop Shipping Problems

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How do I make sure customers don’t order out-of-stock items?
What happens when mistakes are made regarding fulfillment?
Isn’t selling items that you never see difficult?
Do I need to worry about fraud with drop shipping?
How can I determine if I’m dealing with a quality drop shipping wholesaler?

 

How do I make sure customers don’t order out-of-stock items?

One of the biggest challenge with drop shipping is that it can be difficult to know when an item is available at the warehouse – and when it’s out of stock. When a customer orders an item that is listed in-stock and then discovers it’s actually not available, it’s a very poor experience. If this happens too much, your business’ reputation can suffer.

A few advanced drop shippers will have real-time inventory feeds, but these can often be difficult to incorporate into your store. Fortunately, there are services like eCommHub that make it easy to sync your store up with a supplier’s real-time feed and keep inventory counts accurate.

But in the likely event your drop shipper doesn’t have a feed – or it’s difficult to integrate it – you’ll need to rely on other strategies. The best safeguard against this problem is to work with multiple suppliers that have overlapping product lines. This way, if Supplier A is out of an item there’s a good chance Supplier B will have it in stock.

Regardless, keeping inventory and out-of-stock items properly reflected on your websites is one of the biggest challenges associated with drop shipping.

 

What happens when mistakes are made regarding fulfillment?

Fortunately, most drop shippers are fairly good about paying to fix mistakes that they create. For example, if a supplier ships the wrong item to a customer it is their responsibility to pay to re-ship the correct item as well as to pay for any shipping fees involved with returning the incorrect item.

While you may not have to pay for the expenses involved with supplier related problems, it still is a relational issue that reflects poorly on your business and service. This is often made more frustrating if the mistake wasn’t your fault.

But as a drop shipping business, you can’t blame the supplier for the problem. To the customer, you ARE the supplier! So passing the buck isn’t an option if you want to maintain your reputation. Instead, you need to make sure you take responsibility for any problems that arise, and solve them quickly.

Even if the problem will eat into (or eliminate)  your profit for the order, maintaining a solid reputation is crucial. Suppliers will usually pay to fix their own mistakes. But when they don’t – or aren’t willing to – it’s important to understand that you’ll need to occasionally pay to clean up fulfillment messes. It’s simply part of the cost of doing business as a drop shipping retailer.

 

How do you sell items you’ve never seen before?

Selling items that you’ve never physically seen in person can be a challenge! Fortunately, there are a few ways to become an expert on your products without seeing them in person:

Sell Established Products: Established manufacturers will usually have quality, highly informative websites with loads of information including product specifications, pictures and descriptions. This information will be invaluable in learning about your products when you can’t physically see them.

Order Your Most Popular Products: Ordering just your most popular products gives you a chance to use them, learn about them, and be able to sell and market them more effectively. You can also usually re-sell these items as “slightly used” or “refurbished” and re-coup the majority of your investment.

Talk with Your Customers: While a toll-free sales line isn’t the right choice for every business, you’ll learn a tremendous amount about your products (and your customers!) by interacting with them via the phone in the early days of your business.

 

Do I need to worry about fraud with drop shipping?

Unfortunately, dealing with credit card fraud is part of life when selling online. But with some common sense tactics and basic security measures, you can eliminate and/or catch most of the fraud you’ll encounter.

Make sure you require customers to enter their CVV number, which is the last three digits on the back of the card. This makes it more likely that the purchaser has the physical card in front of them when ordering.

Also, make sure the gateway service you use for card processing has AVS – or address verification services – enabled. This security feature ensures that the billing address provided matches the card holder’s zip code on file with the bank. If they differ, the transaction will be declined.

It’s crucial to keep an eye on orders – especially large ones – that have different billing and shipping addresses, as this is where the majority of fraud occurs. If you ship an order to a customer’s billing address, you have a strong recourse in the event of any fraud claims as you checked that the shipment address matched the bank’s information.

But shipping an order to an address other than the official billing address exposes you to significantly more liability. If the order is fraudulent, you’ll likely end up being responsible for paying a refund to the original card holder.

It’s important to screen orders with different billing and shipping addresses for signs of fraud. These include very large orders, email addresses that don’t match the customer’s name and orders with expedited shipping. Usually, it just takes a quick phone call to determine if an order is legitimate or fraudulent.

 

How can I determine if I’m dealing with a quality drop shipper?

A quality drop shipper is crucial to your business’ success, so it’s important to properly vet a wholesaler before you spend months (or years!) building a business around them. Before fully committing, you should do the following:

  • See how knowledgable their sales reps are
  • Place a few small test orders to gauge their fulfillment speed and communication
  • Ask to speak with existing customers as references

 


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