Ecommerce businesses are increasingly turning to dropshipping as a way to sell products online without having to deal with inventory, shipping, or fulfillment. With dropshipping, the store owner handles marketing and selling, while the dropshipping supplier handles warehousing, packing, and shipping orders directly to customers.
This allows ecommerce entrepreneurs to get started with very little upfront investment. However, managing orders and inventory across multiple dropshipping suppliers can quickly become complex and time-consuming without automation. That’s where ecommerce fulfillment automation software comes in — keep reading to find out which features to consider in a buying decision.
And when you’re finished, check out the other content in our ‘Dropshipping’ article series:
- Shipping tools for e-commerce businesses
- How to choose dropshipping ecommerce fulfillment automation software
- 8 best dropshipping suppliers
What is ecommerce fulfillment automation in dropshipping?
Ecommerce fulfillment automation refers to the use of technology and automated systems to streamline and optimize the order fulfillment process for ecommerce businesses. Some key aspects of ecommerce fulfillment automation include:
- Automated order processing
- Automated warehouse management
- Returns automation
- Inventory management
- Analytics and reporting
Integrating with suppliers’ systems is a critical aspect of dropshipping automation software. By seamlessly exchanging information with wholesalers’ tech stacks, the software enables the orchestration necessary to achieve true end-to-end workflow automation for dropshippers.
Automated ecommerce fulfillment software designed for dropshipping businesses generally does not, however, include storefront capabilities or website builders to create online stores.
Instead, its main focus is on the backend order fulfillment process.
The main benefits of fulfillment automation are reducing operating costs through improved efficiency, increasing throughput and order volumes as the system can scale, reducing errors, and providing better visibility and control over the ecommerce operations. The technology handles repetitive tasks to allow staff to focus on value-added activities.
Example of how it works in dropshipping
Let’s say you own a dropshipping store that sells tech gadgets. A customer orders a smartphone from your online store. The order information is seamlessly received by your fulfillment automation software through API integration. The software checks real-time inventory across suppliers and identifies one that has the product in stock. It automatically forwards the order details to this supplier and allocates the required inventory.
The supplier directly ships the product to the customer and updates the tracking information back into the software via API. The automation platform now sends out shipment notifications and tracking details to the customer for full visibility.
Once the customer receives the order, payment is automatically triggered to the supplier and an invoice issued to the customer by the software. If the customer requests a return, the software initiates the return label and logistics through the supplier and kicks off the refund process.
Throughout the order lifecycle, inventory levels, order status and product details are synced between the sales channels and suppliers in both directions through the automation software’s integrations. Historical order data is continually analyzed to generate reports that can optimize the workflows and processes further.
What to look for in ecommerce fulfillment automation software
When evaluating ecommerce fulfillment solutions for your dropshipping business, here are some key capabilities to look for:
Order management
The software should provide a central dashboard to easily manage all incoming orders across multiple sales channels (website, eBay, Amazon, etc.) in one place. This allows you to see and process orders without having to log into multiple accounts.
Features
- Order aggregation: Brings together orders from all sales channels into one unified interface.
- Supplier assignment: Automatically assigns orders to the appropriate dropship supplier based on product, shipping speed, etc.
- Status tracking: See real-time order status across all suppliers.
- Order syncing: Seamlessly sends order details to suppliers and sync updates.
Inventory management
The system should integrate with dropshipping suppliers to sync product catalogs and inventory levels. This automates stock checking and avoids overselling out-of-stock items.
Features
- Central product catalog: Maintain supplier product details in one place.
- Inventory level sync: Update inventory counts across suppliers.
- Stock level alerts: Get notified when a product needs to be reordered.
- Inventory allocation: Assign units to open orders to prevent overselling.
Shipping management
Streamlining shipping and logistics is crucial for dropshipping. The software should provide tools to enable faster deliveries, lower shipping costs, and better visibility.
Features
- Rate shopping: Automate shipping quotes across multiple carriers.
- Rate discounts: Negotiated carrier discounts passed through on labels.
- Label generation: Create ready-to-print labels with tracking numbers.
- Shipment tracking: Monitor shipments from pickup to delivery.
Analytics and reporting
The system should give merchants valuable business insights through analytics and custom reports. This allows you to identify successes and areas for improvement.
Features
- Revenue: Sales volumes, profits, margins by product line, supplier, channel, etc.
- Inventory monitoring: The turnover rates, lead times, and sell-through.
- Fulfillment: Shipping times, carrier performance, landed costs.
- Customer metrics: Lifetime value, repeat rate, referrals.
Scalability for growth
Choosing an enterprise-grade solution built for growth can prevent the need to switch platforms down the road. As your dropshipping business grows, fulfillment software needs to scale with your needs.
Features
- Omnichannel touchpoints: Handle large order volumes across multiple sales channels.
- Vendor management: Add additional suppliers and warehouses domestically and overseas.
- Business development: Expand to new sales channels like social media platforms, marketplaces.
- Pricing matrix: Offer tiered pricing plans to match needs of larger businesses.
- Software: Integrate with other business systems, for instance ERP, accounting, and analytics.
Ease of use
The platform should have an intuitive user interface that allows you to easily access order information, update inventory, configure settings, and view reports. Prioritizing ease of use helps minimize the learning curve and improves adoption across your organization.
Features
- Intuitive interface: Clean, organized dashboard to manage orders.
- Simple setup: Step-by-step wizards for initial setup.
- Automation: Allows you to set up rules to simplify routine tasks like order allocation.
- Mobile access: Mobile app or responsive design for on-the-go access.
- Help resources: Detailed knowledge base and contextual help guides.
- Customizable: Options for advanced customizations as needed.
Technical capabilities and integration
On the technical side, the solution should provide flexible API and integration options to connect with other systems as needed. This enables a seamless flow of data across business applications and trading partners.
Features
- API and EDI integrations: Important for accessing order, inventory, and customer data.
- Storefront integrations: Should work with ecommerce platforms like Shopify, WooCommerce, Magento.
- Accounting software integration: QuickBooks Online, Xero.
- Middleware: Custom middleware to link with proprietary systems..
Ongoing support and training
Managing an ecommerce operation requires learning new skills, adapting to changes, and troubleshooting issues. Your provider should provide stellar ongoing support and training. After all, proactive support and education ensures you utilize the tools to their full potential.
Features
- Setup assistance: Help getting started with initial configuration and importing data.
- Documentation: Searchable knowledge base and setup guides.
- Email and chat support: Quick answers to questions that come up.
- Phone support: Direct access to the support team when needed.
- Ongoing training: Refreshers on using the software effectively.
- Technical support: Troubleshooting API, integrations or performance issues.
Ecommerce fulfillment automation takes dropshipping to the next level
The right ecommerce fulfillment automation platform is critical for efficiently scaling your dropshipping business. Make sure to evaluate both the core order processing capabilities and integration options with suppliers, sales channels, and other systems.
Choosing software that aligns with your needs and can scale enables you to optimize workflows, reduce overhead, and provide a superior customer experience as you expand. Investing in the capabilities of automation is essential for the success and competitiveness of your dropshipping business.
FAQ
Ecommerce businesses can either fulfill orders in-house through their own warehouse and logistics operations, or they can outsource fulfillment to a 3rd party logistics provider (3PL) that handles warehousing, packing and shipping for them.
Automated fulfillment refers to the use of software integrations and warehouse automation technology to streamline ecommerce order processing, inventory management, picking and packing and shipping without extensive human intervention.
While Shopify provides the ecommerce platform and integrations with fulfillment providers, it does not directly offer automated fulfillment services. Merchants have to choose and connect their own preferred 3PL or warehouse automation systems for fulfillment.
