Drop Shipping and EDI

Drop shipping is a supply chain management technique in which the retailer does not stock or take possession of the goods, but instead transfers customer orders and shipment details to either the manufacturer or wholesaler direct. It is the manufacturer or wholesaler who then ships the goods directly to the customer.

Some drop shipping retailers may have example ‘not for resale’ items in store, so that customers can inspect an item similar to those that they can purchase. Other retailers may provide only a catalogue or online listing of their products e.g. Amazon.

Drop shipping reduces inventory, warehousing, packaging, labor and shipping costs for retailers by enabling them to pass orders and ship to information along to the manufacturer or wholesaler direct. EDI can help drop ship trading partners, by not alone providing integrated order, invoicing  and shipping solutions, but by also providing the EDI 846 transaction set otherwise known as the Inventory Inquiry/Advice (INVRPT in EDIFACT). The EDI 846 is used by manufacturers and wholesalers to notify retailers and trading partners of stock and inventory levels so that the retailer doesn’t commit to sales where not enough stock is available.

For further information on how you can use B2BGateway’s EDI solutions to further automate your drop shipping requirements please call (401) 491 9595 or email Sales@B2BGateway.Net