The Top Five Ways to Automate Your Dropship Operations


Are you ready to automate your dropship operations?

Are you seeing success in your eCommerce business, but are unsure how to scale and automate dropship operations? From a lack of visibility to the use of manual processes, dropship order management can become overwhelming.


If you’re an eCommerce operations manager looking to scale your business, we’ve got you covered. Let’s dive into  the 5 key elements for scaling and automating your dropship operations. 

1) Automate your Order Routing

Anyone in charge of dropship order management knows one thing: manual order processing simply does not scale. Between scaling issues, human errors, and delays, manual order processing inevitably leads to a bad customer experience. That’s why automation is an absolute necessity for scaling your dropship operational system and order processing. 



What if your vendors could see orders in real time instead at the end of the day when you had the time to email them over? What if you didn’t have to stress about missing a sales order? Automatic FTP, for example, allows for the automation of mundane and tedious tasks, so you can focus on what really matters: growing your business and keeping your customers satisfied.


A complete dropship automation system should be able to pull off a few functions, including:


  • Intelligently divide order by supplier
  • Send orders automatically to the corresponding supplier & in the right format (email, custom CSV file, or other forms of communication)
  • Acquire tracking info for shipped orders and sync said info back into the eCommerce platform


What if we told you that automated order routing doesn’t only benefit your dropshipping operations, but your vendors too? Manual order processing makes vendors less likely to work with you, as they will have to operate on a slow, manual basis too. Instead, creating a flexible automated system for your vendors will make you easier to work with and result in a better relationship. This means that your vendors will prioritize you and your mutual customer by fulfilling orders and replacing items faster. 

Overall, the money your business saves with automated dropshipping gives you the ability to scale your business quickly, reinvesting profits right back into your business and nurturing growth. The best part? Automated order routing effectively eliminates human error, delays, and vendor disagreements, ensuring that you provide your customers with the best experience possible. 

2) Increase Visibility

It goes without saying that maintaining visibility into all aspects of your business is paramount when trying to hold on to any level of success. One of the aspects of the dropshipping model that is difficult to nail-down is visibility. 

Because so much of your business is outside of your direct control, it is hard to know exactly what is going on and when. For instance, without order and inventory visibility, it would almost be impossible for a retailer to know where a customer’s order is. The real challenge, however, is being able to provide a good customer experience without having direct control over the entire process. Let’s focus on how to accomplish this in three prominent aspects of your ecommerce operations:


  • Order Visibility 

    In today’s world, customers have come to expect full order visibility: “When will my package ship?” “What’s my tracking number?” This is particularly relevant for dropshipping retailers, as a large portion of the order process is out of your direct control. 


    As orders are fulfilled by third-party vendors, it can be difficult to ensure order visibility insights. At the most basic level: you can’t simply look into your own warehouse management system to track the process of an order.


    Furthermore, visibility is especially vital in the case of expectins. For example, if a customer opts to cancel their order, you need to know whether that is possible to eliminate vendor-retailer back-and-forth and corresponding delays. Things like late orders, changes, and cancellations need to be monitored and handled ASAP to ensure a positive customer experience. 


  • Inventory 

    Because you are dealing with shared inventory when dropshipping, it is imperative that you know what is in and out of stock. That way, you can keep your catalog up to date and set reasonable customer expectations regarding backorders. This better business practice sets you up to avoid cancellations and provide a better customer experience.


    Selling out of stock items is equally expensive as it is time consuming, so your dropshipping automation system should be able to read and retrieve current inventory from your vendors and sync it to your catalog.

  • Vendor Performance

    Lastly, vendor performance is important in terms of visibility. A strong feedback loop can be integral in knowing which products and vendors are working well for you. Quickly ask yourself: Do orders typically take two days or two weeks to ship? How easy is it to get a hold of my vendors?


    If any of your answers were less than ideal, the good thing is that multiple vendors sell the same products. Our advice is to pick the vendor that prioritizes your business. Because you will be investing in marketing efforts for your vendor’s products and you both share a mutual customer, picking the right vendor is essential to ensure a positive customer experience. 


    Tools like the vendor scorecard can be of great assistance in monitoring vendor and product performance. If you’re looking for tips on how to find the right vendors for your dropshipping business, check out our free to download vendor scorecard

A flowchart showing key dropshipping automation workflows
Image credit: AP12Cart

3) Build a Flexible System That Works With all Vendors

Because every vendor is different, you can’t expect them to alter their processes for every individual retailer with which they work. Rather, they prefer every retailer to conform to the way they do business. And while they don’t necessarily ‘expect’ this, it doesn’t hurt to sweeten the deal by being flexible. And, in turn, your relationship is likely to get a lot stronger, which will streamline your operations and improve your mutual customer’s experience.


Here are a couple of ways that you can provide a flexible system for your vendors:


  • Sending orders in the vendor’s preferred format
    If possible, have the orders automatically populate the vendor’s own order management systems, so they do not have to do any additional or manual work. Similarly, directly integrating with the vendor’s back-end systems saves them a lot of time and effort.

  • Accepting tracking and inventory information in their preferred format

    Some vendors might send tracking in an Excel file, others might have automated email alerts. Similarly, some inventory communication may be sent via email while others may need to be pulled from an  FTP server. Your system needs to be able to consume all forms of information and adapt to vendors’ various needs.

    Overall, as your business grows and you build on more vendors, your system needs to be more and more flexible. For instance, you cannot email vendors with a CSV file for each order. You need to create an adaptable system that allows you to streamline the order and distribution process across all of your vendors. 

4) Create a Strong Relationship With Vendors

Because most ecommerce stores are not on par with the giants like Amazon or Walmart, they don’t have the ability to dictate the terms of a vendor-business owner relationship. Instead, you’ll want to create strong, mutually beneficial arrangements where you and your vendor find yourselves on the same side of the table, working to help your mutual customers.


As you know, if you want your customers to have a good experience, you need a good relationship with the people supplying the products. This is easy to envision when things are running smoothly, but these relationships are put to the test when orders are canceled and refunds are due. In these instances, you want your vendors to be as responsive and transparent as possible.


Overall, it is important to understand that dropshipping does add an extra burden onto vendors. By doing what you can to be easier to work with, vendors will reciprocate with more favorable treatment. In turn, enhancing customer experience.

5) Have a Plan for Returns

Dropshipping is an undoubtedly clean and simple way to operate an eCommerce business with no physical inventory. But what happens when there are problems with the orders themselves? What happens when products are returned? 

The pain of returns is something many retailers do not realize, but, luckily, there are a few options that make the return process more manageable. 
  • Negotiating with the vendor to accept returns
    Even if vendors charge a restocking fee, it may be worth it to avoid further hassle. Additionally, should they agree to accept returns, make sure you have a dependable system in place so that you’re properly credited or refunded by your vendors. 
  • Opt to accept the returns yourself
    While this can result in a pretty cluttered work space, garage, or storage unit, sometimes it is the most cost-effective option to just keep the returns yourself.
  • Partner with a third-party to accept returns 
    From there, you have the option to store and reship these products as a part of future orders. You could either have them pay you for the products, or you could opt to resell them on a consignment basis. Some examples of third parties that accept returns are Returnly and Return Magic.

    Beyond these aspects of dropship order management and returns specifically, there are a few other things you’ll want to keep in mind to preserve that spirit of dropship automation and strong relationships with vendors and customers alike.

    First, customers are naturally going to want a consistent return policy despite vendors varying policies. Second, keeping track of the products returned most often allows you to either correct any misinformation that might be causing said returns or simply remove them from your catalog altogether.