Social media is bombarding every aspect of the economy, and fashion is no exception. Thanks to social media and the internet in general, we’ve seen a huge increase of new brands popping up on our feed.
With online shopping simplifying the purchasing process for consumers, we’ve seen a rise in e-commerce. In fact, according to research done by Statista, out of the 7.6 billion people on the planet, more than 21% exclusively shop online.
The rise of online shopping has led to the fall of department store traffic and sales. With more online shopping consumers dominating the market, big retailers (Nordstrom, Bloomingdales, etc.) are turning to EDI Dropship to complete their order fulfillment.
What is EDI Dropship?
Forbes magazine defined dropship as: “A method of fulfillment where the retailer you’re buying a product from does not keep the item it’s selling in stock. That item is purchased from a third party, usually a wholesaler or manufacturer, where it is then shipped directly to the customer.”
EDI Dropship: Then vs. Now
It’s important to note how EDI Dropship has changed before elaborating on how it can be beneficial to brands, especially start-ups and up-in-coming fashion businesses.
In the past, retailers (Nordstroms, Saks, etc.) would purchase large quantities of items from you and put them in their department stores. If it sold well, then the item would be featured on the website. If the item did not sell well in stores, then it would be up to the retailer to liquidate the excessive inventory.
This method was great for vendors because they did not have to worry about inventory and made a bigger profit. However, since retailers had to house the inventory, the chances of vendors landing a contract with them were slim.
Things work differently now. In fact, it’s almost the exact opposite. Big retailers rarely place large quantities of orders from vendors anymore. Instead, the vendors house their EDI dropship inventory, and the retailers would test their products only through their website first. If a consumer orders an item from a brand on the site, that information will go directly to the vendor. Then the vendor will package per the retailer’ rules and instructions and send the product to the consumer. Using EDI Dropship, the order appears like it was delivered by the retailer instead of the vendor.
EDI Challenges
Some challenges are expected with the new way EDI dropship operates. Before the vendor would receive larger orders from retailers, and it would be up to the retailers to sell and distribute the inventory. However, now it’s up to the vendors to fulfill and deliver the orders to the customers. This means you are not producing or allocating goods in batches; you’re fulfilling orders one unit at a time. As you can imagine, this could be an inconvenience. Especially since vendors (you) must follow strict branded packing slip shipping labels rules set by the retailer.
EDI Dropship Simplified & Benefits
Partnering with EDI solutions like AIMS360, a fashion business management software, EDI is simplified. Our software manages other aspects of your business operations so we would already have your order, customer, and inventory data on hand!
Your company gets to reap all the benefits the new EDI Dropship model has to offer. For example, with this new model, small fashion business and start-up brands have a chance to increase their visibility to new markets and compete with larger fashion brands. If a vendor’s item performs well on the retailer’s website, then the retailer will most likely order larger quantities to feature in their department store. Imagine your handbag in all of Nordstrom’s stores across the U.S! Now, the retailer will place large orders and expose your products to a broader consumer base. What used to be exclusively for bigger brands, up-in-coming brands can now be featured in a department store if their sales do well on the retailer’s site.
Brand awareness for smaller brands is crucial. This added exposure can help grow a customer base, thus improving business. Want to learn more about how AIMS360 can help you simplify EDI? Feel free to contact us.
AIMS360
empower@aims360.com
310-361-5710
aims360.com
