One of the problems that you’ll most likely come across as you work with dropshipping companies are backorders. Don’t worry, they are a common ordeal for most online sellers that use dropshipping as their supply chain management method. This occurs when there are orders in excess of available stock from the supplier.
First, let’s take the preventive route. To avoid overselling items with limited stock, stay on top available inventory for each product you sell. If you already know that the products you are listing as part of your inventory move fast, stay on high alert and pull it out if you don’t have back up suppliers. Having an inventory management system will also help you keep track of all your product movements.
Still in the preventive mode, make sure you do research on the dropshipping company that you work with even before you sign up. Part of the reliability aspect that you should look into is how often they update their inventory listing.
It’s a good idea to have a disclaimer on your website or on your auctions of the possibility of a backorder (do add that it rarely happens), but in the event that it does, let them know the estimated wait time for the items to get to them. If you have other policies concerning backorders, you may want to include this in your website as well. Having a simple one-liner can avoid future irate customers, knowing that they have been fairly warned.
Last method of avoiding overselling is to keep items in stock and at-hand yourself. However, this really defeats the purpose of sourcing your products via dropshipping as it will require you spend for the inventory upfront. Do this only if you really believe in the product and you are certain that the inventory will be bought. This last tip may be applicable to seasonal items that have had an upswing in purchasing trend in the past years during particular peak months – summer items are a good example.
If you’ve done all that you can to prevent backorders, do know that they might still occur. Your best hope at this point is to learn the art of pacifying an angry customer and properly communicating issues. Apologize to the customer for the inconvenience and state that you are on top of the situation. If the back order is expected to take more than a week, just keep them updated every few days.
Happy selling!
Backorders are a major problem for online retailers using dropshipping. Good to know information. Hope these tips curve my own issues with backorders. Thanks.
Posted by: Miguel Guedes de Sousa | February 02, 2011 at 06:42 PM