News / Shipping and Logistics

Setting the Standard for Drop Shipping

man drops boxes

Last week, DropShip.com announced its drive to create a set of global standards for drop shipping that aims to improve efficiency and reduce costs for retailers and suppliers in the US – and potentially worldwide.

Drop shipping vendor, DropShip.com announced last week that it has created a set of e-commerce drop shipping standards (EDSS) in order to facilitate drop shipping operations between manufacturers/suppliers and commerce retailers in the US.

The announcement was made at the Internet Retailer Conference and Exhibition where DropShip.com exhibited and met with industry-leading solutions providers, as well as drop shipping retailers and suppliers to discuss the EDSS.

The Drive for Standards

DropShip.com believes that the practice of drop shipping in commerce today is a little like the ‘Wild West’ of years gone by – it’s every man for himself and everyone has their own way of doing things. Companies go to great effort and expense to set up and enable drop shipping, which includes massive investments in technology, systems, integrations and IT professionals. DropShip believes a common standard would reduce investment costs, provide direction for companies entering the drop shipping space, enable more drop shipping relationships and also accelerate drop shipping – as well as e-commerce – growth.

DropShip.com is an experienced drop shipping vendor, having performed more than 500 integrations, worked with over 7,000 ordering retailers  and processed data for more than 10 million SKUs. The DropShip.com platform processes over 3 billion drop shipping data points each month and has the ability to interact with just about any industry protocol, format and automation option.

As such, DropShip.com is well placed within the industry to ‘lead the charge’ in creating a set of standards to the benefit of not only their own business, but for the entire sector.

As DropShip.com Founder and CEO Jeremy Hanks said, “A rising tide lifts all boats, right? If we can do something that will benefit everyone in the industry including us, we want to make that happen. There’s no reason drop shipping should be as complicated and painful as it is today, and the first step to getting past that is creating some standards and best practices that everyone can get behind.”

High Expectations

Initial plans for the proposed EDSS focus on the exchange of data surrounding four central business interactions that are involved with drop shipping. These are: product catalog data and images, inventory and pricing updates, orders and order updated/tracking. However, the EDSS is expected to evolve over time as new technologies drive updates.

Blaine Nielsen, DropShip.com President said, “While this is a version one launch, we have over ten years of experience in drop shipping. Add to that the input of other industry leaders and businesses, and we expect the standard to work for almost any company wanting to drop ship. Just as the creation of HTML helped kick start the early internet in the 90s, EDSS will have a tremendous impact on drop shipping and e-commerce. Standards give people the framework to make things happen.”

DropShip.com’s ambition has some substance to it, however an idea that looks good in theory may not come off quite so well in practice. A set of standards makes obvious sense for regulating the work performed by the other vendors and third-party providers that are DropShip.com’s competitors, but will an EDSS have any effect on in-house solutions developed by retailers?

If for any reason the proposed EDSS costs these retailers any further resources to comply, would they be terribly keen to support it in the first place? DropShip.com is taking a long-term view on this particular niche within the shipping and logistics industry, and there may well be more benefits further down the road for retailers that support the EDSS. DropShip.com currently has the ability to facilitate outbound orders travelling internationally, but is limited when bringing orders in to the US. Perhaps a global standard will help them to expand globally with its implementation.

However, the EDSS seems like the sort of idea that has the potential to remove a number of pain points for retailers that are struggling to find great fulfilment alternatives. Perhaps an EDSS would be of even more use in nations like Australia, where e-commerce is still in its infancy and logistics infrastructure leaves something to be desired.

Is this a viable way forward for drop shipping? Is this an idea that should be taken up here in Australia?

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