- Dropshipping is an e-commerce model in which you forgo inventory and buy the items your customers order from third-party suppliers, who then fulfill the orders on your behalf.
- Dropship software automates several e-commerce tasks, such as product listing updates, supplier order notifications and order tracking.
- Features to look for in dropshipping software include supplier automation, order tracking and sourcing management.
- This article is for e-commerce business owners interested in learning more about dropshipping and how to automate it through software.
Dropshipping can reduce your e-commerce company's monthly overhead. Dropship automation software streamlines your dropshipping process and minimizes human error. It's equally useful for longtime dropshippers, e-commerce companies new to dropshipping, and entrepreneurs new to both.
What is dropshipping?
Dropshipping is an e-commerce order fulfillment method through which your company holds no inventory of the products it sells. Instead, when your customers buy from your dropshipping company, you'll buy the item they've purchased from a third party that ships the item to the customer on your behalf. This way, you never directly handle the product during your transaction but can still make money from e-commerce sales.
The most obvious distinction between dropshipping and traditional e-commerce models is that, with the dropshipping model, your company will have no inventory whatsoever. You won't have to find and rent a location to store the items you sell, thus reducing the overhead and logistics usually associated with e-commerce. Instead, you'll just buy ordered products as needed from a manufacturer or wholesaler, who then ships the product directly to your customer.
Key takeaway: Dropshipping is an e-commerce model in which you hold no inventory and buy ordered items from third-party manufacturers or wholesalers, who then ship the products to your ordering customer.
How do you start dropshipping?
Whether you already own an e-commerce store or are starting from scratch, here's how you can start dropshipping:
- Make smart decisions about what to sell. Whether you're interested in selling more general items or niche goods, you'll need to ensure there is demand for them. Look into data on trends, keywords and order volume to determine whether your offerings will actually sell enough units to bring steady revenue to your dropship business.
- Know your competitors. E-commerce is expected to comprise one-fifth of all U.S. retail by 2024, so your dropshipping operation is likely to have ample competition. The best way that you can stand out from your competitors is to research them and see if their offerings leave gaps for you to fill. If you can't identify gaps, you may want to reconsider the items you'll sell.
- Find a dropshipping supplier. This step is perhaps the most important in dropshipping. Without a supplier that can consistently fulfill your orders – a supplier unlikely to run out of stock and leave your dropshipping operation without its backbone – you can't fulfill your obligations to your customers. The good news is that trustworthy suppliers are easy to find, especially with dropshipping software.
Key takeaway: To start dropshipping, choose which items you'll sell, research your competitors, and find a reliable supplier.
What is dropshipping software?
Dropshipping software platforms link your e-commerce company with dropshipping suppliers. Once this connection is established, your company can use dropship software to list items for sale without actually purchasing stock. When a customer places an order, dropshipping software automates the process of getting the order details to your supplier. As such, your company saves time and minimizes errors in relaying customer orders to your supplier.
Through dropshipping software, your company can:
- Quickly add new items to your website
- Automatically place customer orders with your supplier
- Ensure timely deliveries and thorough tracking to customers
- Integrate with other software, including your e-commerce platform and back end of your website
- Enable manual or automatic product price adjustments
- Notify customers when items are abandoned in their cart, confirmed for purchase, shipped, or delivered
- Set items as no longer for sale when your supplier's stock runs out
Notably, these features are almost entirely automated. For example, as mentioned earlier, you won't have to manually send your customers' information to your supplier; dropship software reduces this work to one quick click. Some dropship platforms include additional automation features, which we'll outline in a moment.
Key takeaway: Dropship software automates e-commerce tasks such as listing your products on your website, sending orders to your supplier and tracking shipments.
How to choose dropshipping software
You should choose the right dropshipping brand for your company based on which features the platform offers. These are some common features to look for:
- Abandoned cart notices. Some dropshipping platforms can send triggered emails to people who add items to their carts but have yet to actually buy them. These emails can convert abandoned carts to purchased items, increasing your revenue. Since triggered emails are automated by definition, you won't have to take extra steps to reach these customers.
- Automated supplier orders. Instead of manually submitting your customer's order and shipping information to your supplier, you can use your dropship automation software to deliver this information in a few clicks. This way, you and the supplier both save time on the dropshipping operations and minimize the risk of errors.
- Customer service management. Even dropshipping companies that consistently deliver items on time will hear from their customers at some point. That's why some dropship automation platforms include customer service management tools. With these tools, you can streamline your conversations with customers about their order status and more.
- Order management. This feature automates all order placements with your suppliers. You can use it to create purchase orders with your supplier, and for every order placed, your dropship automation software will update the item's available quantity in your web store.
- Price adjustments. Some dropship automation platforms allow you to set your prices as variable on your website's back end, even if they appear stable to customers. With this feature, you can sell your products at prices that your dropship software deems appropriate for current market conditions and trends. Alternatively, you can set prices manually.
- Product information management. This dropship software feature enables you to directly edit your product listings' information. It also allows you to auto-copy your supplier's description into your listings. Typically, you can add photos to your listing (or remove them if needed) as well.
- Sourcing management. If your dropshipping company buys stock from many suppliers, sourcing management tools may help. With this dropship automation feature, you can create supplier profiles that detail each supplier's products and delivery practices. Some dropship automation platforms can display this delivery information on all relevant product listings, letting your customers know what to expect with their shipping and delivery.
- Supplier management. You can think of supplier management as the parent feature of sourcing management. Where sourcing management deals with what a supplier offers, supplier management deals with interactions. You use this feature set to communicate with your suppliers, update relevant data and stay up to date on your supplier's stock. This way, your items are less likely to sell out.
- Third-party integrations. Just as your shipping software would integrate with your e-commerce platform if you kept onsite inventory instead of dropshipping your items, your dropshipping software should integrate with your e-commerce platform. More importantly, it should integrate with most of your other software platforms. Full integration facilitates easier and more accurate budget forecasting and thus smarter business practices.
- Reporting and analytics. Dropshipping automation involves extensive data creation and usage. As such, some dropshipping platforms include tools for reporting and analyzing this data in neatly presented, easily understandable formats. You can use this information to adjust your dropshipping operations in the near future.
- Tracking. As with all things shipping, knowing where your customers' packages are and when they'll arrive at their destinations is paramount to your company's success. That's why all trustworthy dropshipping software includes tracking features. It often includes the ability to share tracking information and updates with your customers, making your shipping processes fully transparent and increasing your customers' confidence in you.
Key takeaway: Look for features such as supplier automation, order management and tracking in your dropshipping software.
Top dropshipping software
Now that you know what to look for in your dropshipping software, here are some brands that check most or all of those boxes:
Dsco is a shipping company that includes dropship software among its solutions. Businesses that use Dsco's platform will have regularly updated stock counts reflected on their e-commerce websites. When a customer places an order, Dsco will handle all order fulfillment using what it calls "optimized shipping logic."
These are some of the standout features Dsco lists on its website:
- Dynamic order routing
- Extensive support
- Modern, easy-to-use interface
- Multiple third-party integrations
- Rapid onboarding
- Real-time API
Rather than listing its prices on its website, Dsco asks potential customers to directly contact its sales team for pricing information.
Oberlo is full-service dropship software through which you can build your online store, test products and prices, add new products, edit item descriptions, and develop relationships with suppliers. These are some features Oberlo lists on its website:
- Around-the-clock customer service
- Availability in six languages
- Custom web stores, product photos and item listings
- Extensive data access
- Millions of potential items to add to your web store
You can access these tools in one of Oberlo's three pricing tiers:
- The Explorer tier is free and includes audio and visual activities to educate new dropshipping company owners.
- The Grad tier costs $7.90 a month and includes dropshipping courses, regularly updated trend information, and dropship coaching.
- The Boss tier costs $29.90 a month and includes Oberlo's most advanced dropshipping tools.
Spocket is a dropshipping software platform that allows e-commerce business owners to sell products sourced in either the U.S. or the European Union. It includes order management, product information management, supplier and sourcing management, and numerous third-party integrations.
Spocket offers four pricing tiers, all of which include a 14-day free trial.
- Free: Spocket recommends the free plan for e-commerce business owners who want to see the items that Spocket would give them the opportunity to sell upon signing up for a paid account.
- Starter: This tier costs $24 a month and allows you to sell up to 25 unique products. Email support is available.
- Pro: This tier costs $49 a month and allows you to sell up to 250 unique products and 25 premium products. Email and chat support are available, as is branded invoicing.
- Empire: This tier costs $99 a month and allows you to sell up to 10,000 unique products and 10,000 premium products. Its support and branded invoicing features are the same as the Pro tier's.
Yakkyofy is an entirely free dropshipping software platform that enables your company to sell products at what it calls "B2B prices." Once customers place orders, it takes just a few clicks to fulfill them. Its goal is to free up dropshippers' time to focus on marketing rather than the tedious tasks associated with order fulfillment.
These are some of the features Yakkyofy lists on its website:
- B2B quotes for dropshipping products, with prices for hundreds of countries
- Multiple items delivered in one package
- Personalized packages and customized cards
- Shipping within three to 12 business days
- Tracking for all items
- Virtual warehouse to keep tabs on stock for all items you sell
Through ZhenHub, you can remotely find a warehouse, organize your orders, manage your inventory, and oversee shipping and tracking. You can also customize all customer notifications with special fonts, greetings and your company branding. Extensive reporting is available.
ZhenHub has four pricing tiers with varying integrations, locations, user limits, and monthly online order and tracking allowances, as detailed in its pricing chart.
- Free: $0 a month
- Starter: $29 a month
- Standard: $69 a month
- Professional: $179 a month
Key takeaway: Dsco, Oberlo, Spocket, Yakkyofy and ZhenHub are some of the best dropshipping software platforms for e-commerce companies.