Factors affecting sales generation with drop ship data

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Transforming Data - LogoMark Goodwin works for Transforming Data a Cloud based Data Transformation solutions provider who operate an on-demand hosted data conversion platform doing any to any format conversions for file types ranging from CSV, Flat Files, and XML through to EDI.

Today he looks at the things you need to be aware of when using drop ship data.

Dropship DataFactors Affecting Sales Generation with Dropship Data

This article is not about what technology or system to use but rather how data and related factors may be adversely affecting your sales efforts.

It’s the time of year that Retailers are gearing up for the large Quarter 4 ‘push’ running up to Christmas and the New Year. For many this is the period that can makes up for slow summer sales; hopefully allowing for a more stable financial footing come the New Year.

A common practice for many retailers is to leverage products and ranges listed in Drop Shipping catalogues. In theory it sounds like a fantastic idea, so many products with the opportunity to make sales…but there are considerations.

What’s Your Strategy?

A solid strategy is pivotal in leveraging DropShip Data. Considerations would include but are limited to:-

Data Quality

No Data Source is Created Equally. Some Catalogues are better than others. If relevant pieces of information are missing like EAN/ UPC codes or Hosted Images, this could cause major headaches when trying to list on Marketplaces as New Product Creation and Product Lookup will be severely hampered.

Product Scarcity

Product Scarcity may play a key role in generating more sales. An ideal scenario is in finding a source of products that have little or no direct competition online for items that buyers want or need. This requires a lot of homework on the part of the Seller but can pay big dividends one found and leveraged.

Management of Margins

Under-priced goods can yield good margins. However if you are listing low margin products in mass with the use of Auto-Repricing technology, be careful in setting your lowest acceptance rate above the dropship price with your minimum margin factored in (i.e. DropShip Price + 25% = Lowest Acceptance Rate). Protect your margins at all costs.

Getting Data out of Catalogues into Listings

So you have finally found a collection of Dropshipping catalogues that have the right blend of scare products, good availability with the possibility of healthy margins. Your requirements are now to ‘Unlock’ this data source and make it valuable.

This task must be done in a timely and accurate manner. A common scenario for companies who off shore work or doing it in-house is the time factor. By the time the data has been converted, many products may have been discontinued or are on a long back-order. Speed is essential as data rapidly changes with DropShip/ Virtual Stock Suppliers.

Supplier Reviews

Sales data needs to be collected, KPI’s (Key Performance Indicators) set and reviewed. This provides an insight into delivery times, key items out of stock, refunds, margins, profitable products/ranges, poor preforming products, customer reviews, etc.). Based on the KPI’s set for Dropshippers, retailers can decide who to add further investment with and who to stop using.

Marketplace Algorithms

Each marketplace uses their own custom Algorithm to rank and sort product listings depending on a number of internal ‘weighted’ factors such as price, sellers performance, postage costs, days listed (freshness), click through impressions, titles, key words, etc.
Getting a better understanding of the basic metrics that affects each marketplace’s Algorithm will give Sellers a better insight into hopefully not creating ‘Stale Listings’. This is an important factor if the seller is listing a huge volume of SKU’s.

End Point Presentation

Buyers don’t care how much time and hard work went into collecting, extracting and converting data for listing. They are only concerned about factors such as the ‘Presentation of the Product Ad’, Price, Delivery Time and Cost, Returns, Money Back Guarantees and Past Buyers Ratings.
In essence this is a Confidence game, the more confident Buyers feel about your product offering (presentation, branding, title, description, image, etc.)the greater they possibility you will make sales.
Some Buyers may even spend more money for the same product with a different seller because they don’t have a nagging feeling of ‘will my product turn up’ or ‘What if I need to return it?

Different Product, Different Marketplace?

Depending on what products you selling, certain marketplaces will yield better results than others as they attract more buyers for that product type. Only you will know when sales data is analysed what proportions of your sales are coming from each Marketplace.


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