utomotive eCommerce sales are shattering records and are showing no signs of slowing down. Consumers and automotive professionals are finally adapting to “internet first” purchasing behavior. As a result, automotive and powersport companies traditionally bound to brick-and-mortar business models must move online or get left behind.
Nonetheless, turning your business into an eCommerce powerhouse takes a lot of delicate work and dedication. With low capital requirements for starting dropshipping businesses, the competitive landscape is fierce. You may already have a good handle on how dropshipping can help your business grow (if not, check out our recent blog), but working with hundreds of eCommerce companies has taught us one very important lesson: having the right fulfillment partners can make or break your business.
Many wholesale distributors have offered dropshipping as a service for decades. When you are ready to place an order from a customer, you could find the product in a catalog, place an order by phone or email, and will receive a PO for all orders placed within a designated time frame. And so emerges a new rubric for selecting partners, one that requires building relationships based on accuracy, speed, and agility.
As you look to expand your product offerings and further leverage dropshipping, you need to determine who your preferred distribution partners.
When selecting a distribution partner, we encourage you to consider the following:
While using dropshipping, manufacturers are typically the cheapest option for buying items on face value, but they also have requirements and can involve added expenses. Similarly, some manufacturers will have categories of delivery prices based on the amount of product shipped, so the price per item is the only factor to consider. Besides that, rates are not always fixed. As a consequence, you must confirm that your suppliers provide you with regular statistics on increased prices.
Clear, safe, and reliable stock updates are essential to your company's success. You should be sure that your distribution partner provides regularly updated inventory feeds, ideally via FTP or API. Large wholesale distributors like Premier Performance, Turn14, Keystone, Meyer, and Holly all offer APIs, providing near real-time inventory updates on stock across multiple distribution centers. This information can then be instantly synchronized through platforms and marketplaces by using a integration platform like FeedStation to ensure you never miss a sale and you never oversell.
However, this capacity is often limited at smaller distribution centers and among manufactures. In this circumstance, you need to ensure you are receiving regularly scheduled updates in some level of digital format. If inventory updates are outdated, you risk overselling (or underselling). This can immediately reduce the efficiency of your employees and ruin your seller rating if trends continue.
Since their existing technologies are restricted by the report and delivery forms submitted by their suppliers, most sellers face inventory latency. Some companies are accepting the file in a wide range of formats due to this factor. This can create a huge bottleneck for your company's growth.
Amazon sellers know the terms of lead times and ‘ship by’ date well. If you’re into dropshipping, fulfillment in-house, or partnering with a 3PL to distribute, hitting shipment deadlines will greatly affect your business. The competition is aggressive, and having many 2-3 star ratings on major eCommerce platforms can destroy your online business.
The lead time of each product plays a key role in your company's ranking (especially in Amazon's A10 Algorithm), but you also need to make sure that the products are being delivered on time. Delayed shipment may lead to bad reviews across marketplaces like Amazon, eBay, and Walmart, ultimately crushing your company's growth.
There are some chances that everything may not go as planned. This could also be the case with your fulfillment partners. You need to be aware that if a delivery is not completed on time or if anything occurs that leads to the order cancellation, your company will be considered responsible for it. Your seller score will be affected in any of these situations that is not a good thing for your online business.
The best way to deal with these situations is to stay updated. Keep monitoring the order fulfillment status to stay in the business.
Figuring out how to deal with the returns is also a crucial step. We will suggest you work with the distribution partners who are offering these services. But, if your distribution partner is not offering these services, you can work with third-party companies to deal with the returns. Several companies that have a huge network to deal with the returns are available in the market.
Product data (often referred to as PIES data in automotive) is a crucial piece of information that is ignored by several companies. This may not be an issue for the Amazon sellers that can "simply" (or not so simply) do ASIN matching, but if you are working on eBay, you must have the product data in their systems format. The same goes for any listings you create on your website.
Using a reliable service to get the exact title and description can be a heavy lift, and going straight to the manufacturer to get this information requires a lot of legwork (and cleaning). To be successful, you’ll have to identify data partners that can compile all configuration and product details, remove any bugs, and deliver the details straight to the marketplace.
You should also ensure that the products are precisely described to avoid any confusion. There shouldn’t be any mismatch between what you have listed and what your customers are actually purchasing in your online store.
Fitment data (often refered to as ACES data) comes from similar sources, but is even more complicated to get and publish out to marketplaces. You can use different resources and platforms like ASAP Network, DCi, SEMA Data Co-op, and Opticat to get fitment data, though some manual trouble shooting should be expected.
Fitment data can also be used for creating useful listings, but it may also not be a reliable source in some cases. Nonetheless, fitment data should be a top priority as it helps you in increasing the conversion and reducing the returns. This data is also considered a source of improving the SEO of your website.