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Social media is bombarding every aspect of the economy and fashion is no exception. Thanks to social media and the internet in general, we’ve seen a huge increase in new brands popping up on our feed. With online shopping simplifying the purchasing process for consumers, we’ve seen a rise in e-commerce. In fact, according to research done by Statista, out of the 7.6 billion people on the planet more than 21% buy exclusively online.
The rise of online shopping has led to the fall of department store traffic and sales. With more online shopping consumers dominating the market, big retailers (Nordstrom, Bloomingdales, etc.) are turning to EDI Dropship to complete their order fulfillment.
What is EDI Dropship?
Forbes magazine defined dropship as: “A method of fulfillment where the retailer you’re buying a product from does not keep the item it’s selling in stock. That item is purchased from a third party, usually a wholesaler or manufacturer, where it is then shipped directly to the customer.”
EDI Dropship: Then vs Now
It’s important to note how EDI Dropship has changed before elaborating on how it can be beneficial to brands, especially start-ups and up-in-coming fashion businesses.
In the past, retailers (Nordstroms, Saks, etc.) would purchase large quantities of items from you and put them in their department stores. If it sold well, then the item would be featured on the website. If the item did not sell well in stores, then it would be up to the retailer to liquidate the excessive inventory. This method was great for vendors because they did not have to worry about inventory and made a bigger profit. However, since retailers had to house the inventory, the chances of vendors landing a contract with them were slim.
Things work differently now. In fact, it’s almost the exact opposite. Big retailers rarely place a large quantity of orders from vendors anymore. Instead, the vendors house their EDI dropship inventory and the retailers would test their products only through their website first. If a consumer orders an item from a brand on the site, that information will go directly to the vendor. Then the vendor will package per the retailer’ rules and instructions and send the product to the consumer. Using EDI Dropship, the order appears like it was delivered by the retailer instead of the vendor.