Make consumer direct fulfillment painless & profitable.

Consumer direct fulfillment, or drop shipping, is an increasingly popular way to fulfill orders. But fulfilling drop-ship direct orders without automation drains your profits. SPS Commerce can help you drop ship profitably and efficiently, while meeting any retail fulfillment requirement.

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#1 in drop-ship direct fulfillment

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12,000 drop-ship connections

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400+ 3PL partners

What is consumer direct fulfillment?

Consumer direct fulfillment, which is also called drop-ship direct fulfillment, is an order fulfillment method in which you fulfill an order directly to a consumer on behalf of a retailer. Drop shipping continues to grow in popularity as consumer preferences shift toward e-commerce.

Advantages of consumer direct shipping include:

Increase revenue

Retailers often use drop-ship direct fulfillment as a way to offer specialty items to consumers that don’t make sense to order in bulk and carry in their inventory. With drop shipping, retailers can carry your full range of products, including all styles/models, colors and sizes.

Appeal to more retailers

Many retailers are specifically looking for drop-ship capable suppliers. Being capable of handling all types of order fulfillment, including drop shipping, makes you a more desirable trading partner.

Cost-effectively test new products

Retailers frequently use drop shipping to test new products prior to committing to bringing them into stores. Drop shipping helps you and your retail customers quickly gauge demand for a new product.

In its simplest form, drop-ship direct fulfillment works like this:

How Drop Shipping Works
  • Suppliers provide detailed item information to the retailer, so the retailer can set up items within their item system and on their website
  • Supplier provides regular and timely inventory updates to retailer
  • Consumers place orders with the retailer
  • Retailer places an order with the supplier
  • Supplier acknowledges they’ve received the order, alerts the retailer of any order discrepancies and their ability to fulfill the request
  • Supplier provides the retailer with ongoing order/shipment statuses where applicable
  • Supplier generates shipping documentation with retailer’s brand, including branded packing slips and labels
  • Supplier ships to the consumer
  • Supplier alerts the retailer with shipment information and invoice
  • Retailer provides the consumer with continuous order/shipment information
  • Supplier invoices the retailer for the shipment
  • Consumer receives product
  • Supplier and retailer handle returns as needed based on agreed-upon process

Common challenges of consumer direct fulfillment.

There are a lot of moving parts between suppliers and retailers when fulfilling orders directly to consumers. We interviewed more than 100 suppliers that drop ship. Here’s what they reported as their biggest three challenges.

#1

Providing frequent inventory updates and managing level of content

#2

Understanding retailer trading requirements

#3

Keeping up with order volumes

Conquer the complexities of consumer direct fulfillment.

Each retailer you work with has different drop-ship requirements. Many retailers require 10 or more communications for a single order. Automation can streamline the process, reduce the potential for error, increase sales and boost profits.

SPS Commerce can help you achieve your consumer direct fulfillment goals.

Assortment

Assortment makes it easy to share product data with your retail and distribution partners across any sales channel. Provide retailers, distributors and consumers with robust product attributes and descriptive content to fuel their purchasing decision.

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Fulfillment (EDI)

Fulfillment is a full-service EDI solution that helps you meet complex retail requirements with ease. Our expert team does all the heavy lifting to help you automate the order cycle and minimize manual work. Plus, Fulfillment automates the process of creating retail-compliant shipping documentation, such as labels and packing slips.

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Carrier Service

Carrier Service is an enhancement to our Fulfillment solution that helps you find the most cost-effective shipping rates. Carrier Service simplifies the process of managing drop-ship orders, including booking shipments, managing order tracking numbers and printing shipping labels.

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Inventory Service

Inventory Service is also an enhancement to our Fulfillment solution that makes it easy to provide inventory updates. This service helps minimize data entry, reduce errors and meet retail requirements for inventory information.

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3PL Network

Many suppliers use logistics providers to help them implement or scale their drop-ship operations. The SPS 3PL network consists of trusted logistics providers that can help you  manage inventory and ship direct-to-consumer orders on your behalf.

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What EDI documents do I need to exchange for consumer direct fulfillment?

EDI is the fuel and foundation for a healthy drop ship operation. Listed below are the most common transaction documents for drop ship.

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832 (Item/Catalog)

Used to obtain product information and load to the item master file for new items, item updates or discontinued product notification.
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850 (Purchase Order)

Used in drop ship for ordering products to be shipped from a vendor/supplier.
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855 (Purchase Order Acknowledgment)

Used by suppliers to acknowledge the receipt of the retailer’s purchase order.
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856 (ASN Shipment Confirmation)

Used as advance ship notice or shipment confirmation. This document is sent from the supplier to the retailer. Retailers will use this to get visibility into inbound shipments, receiving automation or proof of shipment for direct-to-consumer orders.
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810 (Invoice)

Used by the supplier to invoice for consumer shipments to the retailer. This may include shipping and handling.
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846 (Inventory Availability)

Most commonly used by suppliers to provide available and future inventory quantities, either globally or by ship from location.
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860 (Purchase Order Change)

Used by retailers to communicate order changes to the supplier.
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865 (Purchase Order Change Acknowledgment)

Used in retail to confirm acknowledgment of a PO change or order cancelation.
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Branded Packing Slip

Ensures the vendor shipments represent the retailer’s brand and have continuity between vendor deliveries and those fulfilled by the retailer for customer loyalty. Return policies and product returns procedures can also be included.
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180 (Return Authorization Requests and Approval - RTV)

Used to communicate between buyer and seller, a request for consumer returns to the supplier when applicable based on trading partner agreement between the two parties.

Start a consumer direct fulfillment program or improve existing capabilities with SPS Commerce.

Optimize drop ship order management, inventory, sales channels and fulfillment processes with help from the experts.