By Jim Lewis, CEO Enhanced Retail Solutions LLC
More and more of the suppliers in our client base are growing their drop ship assortment. That means they are carrying more inventory. And because their retailer partners generally don’t commit to this product, they are also carrying more risk. That means they must watch inventory levels and monitor sales performance carefully. It’s easy to do for a few items, but hundreds or thousands of SKU’s require a significant number of additional resources and skills.
A New Tool Is Needed
For this type of business, the supplier must act more like a retailer and manage the business like a buyer. ERS developed a drop-ship management tool to help them benchmark, track and forecast these items to make better purchasing and merchandising decisions. The process of developing the tool and the success a key client has with it is covered in the case study Tracking the Performance and Managing Inventory for eCommerce and Drop Ship Items. You can download a free copy from our website here.
The case study details 6 steps required to manage the business and provides examples and insights for each step:
1: Data Requirements and Technology Platform
2: Collecting the Data
3: Establishing Sales Performance Benchmarks
4: Establishing Inventory Health Benchmarks
5: Determining the Recommended Action
6: Putting the Information Together
The drop ship tool is not a flat report. It has built in intelligence. Based on criteria set up for each product class, it ranks items and provides recommendations for each item- buy, watch, markdown, sell down, etc. This enables the user to prioritize the biggest opportunities and liabilities and act.
Download your free copy today or contact us to learn how you can start using the tool.
Thanks to our interns Lauren Cohen and Wenxin (Helen) Lee for helping us put the case study together!