How to Automate Dropship Order Routing to Your Suppliers
Last updated on May 17th, 2022 at 04:52 pm
One of the things that makes dropshipping so attractive is that you don’t have to handle shipping once a customer places an order. However, you’re still responsible for forwarding sales orders to your suppliers.
When fully automating your dropship business, addressing dropship order routing is the first stage.
If you’re selling a few hundred products a day—sourced from multiple suppliers—it becomes nearly impossible to manage orders without dropship automation software.
Keep reading to learn more about the importance of automated order routing and how to work with your supplier to make this happen.
How Automatically Routing Orders to Suppliers Saves You Money
If your day consists of a chaotic mix of outdated systems or paper-based order management tasks, moving toward order automation offers several advantages.
Organizations of all sizes can benefit from this automation. This is even more true in international companies dealing with the additional complexities associated with import tariffs and language barriers. Yet, even email businesses that don’t spend a ton of time with their current processes may have difficulty keeping up as they scale.
Let’s take a look at an example of a traditional purchase order. First, a requisition is raised, and a purchase order is sent to the supplier. Then, the supplier interprets the order and copies it into their enterprise resource planning (ERP) system.
The above process is costly to manage, time-consuming, and offers several opportunities for bottlenecks to surface—all of which cause substantial delays.
Automation Reduces the Risk of Human Error
Between a buyer and a seller, purchase orders act as binding legal documents. Each PO must indicate the products, quantities, and agreed-upon pricing. Internally, businesses use POs to control purchasing and keep tabs on overall cash flow.
Making mistakes on a purchase order could mean going back and forth with your supplier to get things right, ending up sending your customer the wrong product, or spending more money than intended.
Manual processes like these create the potential for several errors in each order. These include incorrect supplier names and SKUs, lack of authorization, illegible handwriting, failure to place orders with preferred suppliers, and failure to provide all required information. Once errors are identified, you’re forced to track down and address them—with the precious time you can’t afford to allocate to this effort.
Submitting POs manually also makes it challenging to comply with regulatory or business requirements. If you can’t track the exact process for every order, how do you know you’re executing the purchase order process to the letter each time?
Save Time and Resources
When you can automate dropship orders to your supplier, you no longer have to spend time digging for information you’re required to include. You can put together an order in a fraction of the time (sometimes in a single click) and automatically send it to your vendor.
Automation allows you to complete the entire process in real-time. The traditional approach of using paper forms that must be mailed, faxed, or scanned can dominate several hours of your day. Plus, you’ll spend less time tracking down missing POs. The entire process moves faster, so you and your team can focus on other essential aspects of your business.
Identify Possible Dropship Order Automation Opportunities
The first step of dipping your toes into dropshipping automation is to discuss possible options with your suppliers.
Most suppliers have at least partially automated processes for accepting and managing orders through their website or B2B portal. This requires you or a team member to type your orders into their website manually.
If your supplier is open to accepting orders in another way, there are two possible options they’ll entertain:
- Receiving orders via email (ideally with an attached CSV file in a specified format)
- Accepting orders via EDI or API
Before you can begin discussing sending orders via email or an AP or EDI connection, you may have to prove it’s a viable solution that’s worthy of their time and hit a particular order volume first.
Don’t be discouraged if your supplier isn’t willing to have this conversation right away. It may take some time, but show them that it’ll be worth it by proving that you’re a reputable, high-volume retailer.
Submitting Dropship Orders via Email
The efficiency gains in emailing orders lie in automatically copying over order details (such as the products ordered, ship-to address, and more) into a format you can send to your supplier.
It’s possible to set up a vendor portal to allow your suppliers access to order information. Most are reluctant to agree to this scenario, but it’s worth asking. In most cases, suppliers prefer to receive emails with CSV attachments instead of logging into a portal.
Submitting orders via email can substantially streamline and speed up the time required to submit orders to your supplier. It also reduces the risk of error-prone data entry, as we discussed earlier.
However, it doesn’t help you with shipment tracking updates, which is another critically important piece of automating this process. This is why submitting orders via EDI or API is the best option, which we’ll discuss next.
Submitting Dropship Orders via EDI or API
With EDI or API development, you can effortlessly send a purchase order to your supplier electronically. When your supplier receives the PO, it’s planted directly into their ERP.
When connected via EDI or API, this process is no longer simply about sending a PO electronically to be read and transcribed by another person. With this level of development, you can create and send automated POs without any human input.
When deciding between these automation options, many retailers choose to begin with email. Usually, this is because most ecommerce platforms provide semi-automated solutions to send emails to dropship suppliers.
API and EDI integrations are less common—especially when just starting—because they typically require custom programming and costly development.
Take the First Step Towards Dropship Order Routing Automation
In many cases, dropship order routing is the first process to automate because it’s usually the lowest hanging fruit for automation opportunities.
The critical advantage of utilizing an automated system is speed. By significantly reducing the time traditionally taken to create, process, and send documents like POs, you can focus more on tasks that add value to your business.
If you’re interested in automating every aspect of your dropship business, check out our guide to the 7 Stages of Dropship Automation for more.
And if you’re not sure where to start, talk with one of our experts about how we can help.