Retailer’s Perspective: Mastering Your Manufacturing Model
- 5th September
- Sue Cook 2
Drop shipping is an ideal solution for retailers whose product offer is shaped by customer demands. Sue Cook from Bosco Bear shows us how to master it.
Though some retailers may question the value of drop shipping, this type of fulfillment is ideal for businesses that offer products on-demand. At Bosco Bear, we provide drop shipping services for a range of retailers and e-tailers including Domayne, Deals Direct and Tots and Tales. Specialising in home décor, interiors and personalised gifts means we are heavily influenced by the customer’s tastes and requirements. As a consequence, our manufacturing model is based on the idea that nothing gets processed until something is ordered.
The Bosco Bear design team work to produce a range/new collection bi annually. They then work on the designs, photography and cataloguing before marketing these to the Bosco Bear community as well as retail partners.
As such this working model is great for drop shipping. By delivering the digital assets up front, we then work with our clients to sell these designs or products without having to produce them or without the need hold a lot of stock.
Instead, they place an order with us when something sells, we produce the item and we then either ship direct to the end customer or to the store via click and collect arrangement. We then reconcile all of the orders at the end of the month and invoice for payment.
These are some of the most useful things we’ve learnt about making this business model work.
• Your photography not only needs to be a good, it needs to be readily available to your retailers so that they can easily upload it to their websites. A trade image library is a good way to manage this especially if you have lots of products like we do at BoscoBear
• It is important to have SLA’s (service level agreements) in place to outline delivery times and schedule for customer returns and payments.
• In-store catalogues can help your bricks and mortar clients sell product without having to physically hold the stock. Our clients Baby Kingdom and Domayne like this model as they can take the sale and place the order for us to ship direct to customer.
• It is essential to have a great ordering system in place. Our production team uses a bar coding and ordering system that our clients place their orders into. We then reconcile their account at the end of the month
• If you are continually releasing new products, you should have a process in place to notify and supply your retailers of these developments
• Work out trading terms that allow everyone to compete, no matter which way they sell. Although this is tricky, it is fundamental to achieving success with this model.
• You should understand the margins and costs of your manufacturing process before determining your trading terms. This will help you work out if what you’re offering is commercially viable.