How Automated Dropshipping Helps Marketplaces Scale Faster

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An intro to automated dropshipping

Imagine you're the founder of a fast-growing ecommerce marketplace. 

You've built a loyal customer base and dream of expanding your product assortment to keep them returning for more. But as you start reaching out to potential brand partners, you quickly realize how time-consuming and tedious the process can be. Hours are spent researching brands, crafting outreach emails, negotiating terms, and figuring out logistics—all while trying to run your business's day-to-day. It's enough to make your head spin.

But what if there was a way to streamline those manual processes? 

To automate the most time-consuming aspects of dropshipping so you can focus on what matters most – growing your business? Enter automated dropshipping.

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What is automated dropshipping?

Automated dropshipping is using technology to automate the various tasks involved in running a dropshipping business. This can include everything from researching and onboarding new suppliers to syncing inventory and processing orders.

For example, you want to add a new product category to your marketplace. With automated dropshipping, you could use a platform like Canal to quickly search for and connect with relevant suppliers rather than spending hours manually researching and reaching out to brands. Once you've found a supplier you want to work with, you can use the platform to automatically generate and send a partnership proposal rather than drafting one from scratch.

What aspects of dropshipping can be automated?

Dropshipping supplier research & outreach

One of the most time-consuming aspects of running a dropshipping business is finding and onboarding new suppliers. With an automated dropshipping platform, much of this process can be streamlined.

For example, Canal offers a curated network of over 900+ vetted suppliers, making it easy to find and connect with brands that fit your marketplace well. Rather than spending hours scouring the internet for potential partners, you can use Canal's search and filtering tools to quickly identify relevant suppliers based on criteria like product category, price point, and location.

Once you've found a supplier you're interested in working with, Canal makes it easy to reach out and start a conversation. You can use the platform's built-in messaging tool to introduce yourself and your marketplace and even send over a pre-populated partnership proposal with just a few clicks.

Partnership proposal creation

Crafting a compelling partnership proposal can be time-consuming, especially if you're starting from scratch each time. With automated dropshipping, you can streamline this process using pre-built proposal templates and auto-filling details like commission rates and shipping terms.

For example, you want to propose a 20% commission rate and 2-day shipping for a particular supplier. With Canal, you can use the platform's proposal builder tool to quickly generate a professional-looking proposal that includes all the key details. You can even customize the proposal to include your branding and messaging.

Not only does this save you time, but it also ensures that all of your proposals are consistent and include all necessary information. This can help you build trust with potential partners and increase the chances of accepting your proposals.

Partner and/or supplier website integration

Once you onboard a new supplier, the next step is to integrate their products into your marketplace. This can be a complex and time-consuming process, especially if you're working with multiple suppliers who use different ecommerce platforms and product data formats.

With automated dropshipping, this process can be greatly simplified. For example, Canal offers pre-built integrations with popular e-commerce platforms like Shopify, BigCommerce, and Magento. Once a supplier has been onboarded, their product data can be automatically synced with your marketplace in just a few clicks.

This not only saves you the time and hassle of manually importing product data but also ensures that your marketplace always has the most up-to-date information. If a supplier updates their product details or inventory levels, those changes will be automatically reflected on your site.

Partner inventory syncing

Keeping track of inventory levels across multiple suppliers can be a logistical nightmare. If you're not careful, you could end up overselling products or frustrating customers with long wait times for out-of-stock items.

With automated dropshipping, inventory syncing can be completely automated. For example, Canal's platform automatically syncs inventory levels from suppliers to marketplaces in real time. If a supplier sells out of a particular product, that change will be immediately reflected on your site.

This not only helps you avoid overselling but also ensures that your customers always have access to the most up-to-date inventory information. This can help build trust and improve the overall customer experience.

Pricing and promotion

Managing pricing and promotions across multiple suppliers can be complex and time-consuming. However, with automated dropshipping, much of this can be streamlined.

For example, Canal allows you to set custom pricing rules for each supplier, such as adding a percentage-based markup to their base price. You can also set up automated promotions, such as discounting certain products during a sale event.

This not only saves you time, but it also gives you greater control over your margins and helps ensure that your pricing remains competitive.

How dropship automation helps you grow with fewer headaches

Now that we've covered some of the key aspects of dropshipping that can be automated, let's take a closer look at some of the specific benefits.

Saves developers time

One of the biggest benefits of automated dropshipping is that it can save your developers significant time. Rather than building custom integrations for each new supplier, platforms like Canal offer pre-built connectors that can be set up in just a few clicks.

This means your developers can focus on more strategic initiatives, such as improving your site's user experience or developing new features.

Reduces manual errors

Manual data entry is not only time-consuming, but it's also prone to errors. With automated dropshipping, much of the data entry and syncing process is automated, which helps reduce the risk of manual errors.

For example, you're manually importing product data from a new supplier. If you accidentally input the wrong price or SKU for a particular product, it could lead to customer confusion and lost sales. Automated dropshipping greatly reduces this risk since product data is synced automatically from the supplier's system.

Improves the customer experience

By automating key aspects of the dropshipping process, you can provide a better overall experience for your customers. For example, by automatically syncing inventory levels from suppliers, you can ensure that customers always have access to the most up-to-date stock information. This helps build trust and reduces the risk of frustration or disappointment if a product is unavailable.

Similarly, by automating the order processing and fulfillment process, you can ensure that orders are shipped out quickly and efficiently. This helps improve customer satisfaction and can even lead to repeat business and positive reviews.

Allows you to scale faster

The biggest benefit of automated dropshipping is that it allows you to scale your business faster and more efficiently. By automating time-consuming tasks like supplier onboarding and product data syncing, you can focus on growing your business and expanding into new markets.

For example, you want to expand your marketplace into a new product category. With automated dropshipping, you can quickly search for and onboard relevant suppliers, rather than spending weeks or months manually researching and reaching out to brands. This allows you to move faster and capitalize on new opportunities.

Check out 3 dropship automation success stories

To illustrate the power of automated dropshipping, let's look at three real-world success stories from marketplaces that have used Canal to streamline their operations.

100 Thieves

100 Thieves is a popular gaming and lifestyle brand that frequently collaborates on limited-edition product drops with other brands. In the past, managing these collaborations was a time-consuming process involving manual coordination between the 100 Thieves team and their partners.

By using Canal, 100 Thieves automated much of the collaboration process. They could quickly onboard their partners onto the Canal platform, automatically sync product data and inventory levels, and streamline the order fulfillment process.

As a result, they were able to launch their collaborations faster and more efficiently while also providing a better experience for their customers. They saw an 80% sell-through rate within 24 hours of their most recent collaboration launch.

Flip

Flip is a marketplace that specializes in buying and selling used electronics. One of their biggest challenges was processing and fulfilling orders efficiently, especially as they scaled to multiple suppliers and product categories.

By using Canal's automated dropshipping tools, Flip was able to streamline its order processing and fulfillment workflow. It could automatically route orders to the appropriate suppliers, sync inventory levels in real-time, and provide customers with up-to-date tracking information.

As a result, they could process orders faster and more accurately while reducing the risk of overselling or stockouts. This helped them improve customer satisfaction ratings and grow their business more efficiently.

Great Jones

Great Jones is a DTC cookware brand recently launched a marketplace featuring curated kitchen and dining products from third-party suppliers. One of their main goals was to provide their customers a seamless, on-brand experience, even when purchasing products from other brands.

Using Canal's white-label dropshipping tools, Great Jones created a fully customized marketplace experience that felt like an extension of their brand. They could curate a selection of high-quality, complementary products from trusted suppliers while maintaining control over the customer experience.

As a result, they increased their average order value by 66% and provided a more engaging and valuable experience for their customers. This helped them build stronger relationships with their audience and differentiate themselves in a crowded market.

2024 outlook for marketplaces: dropship automation is here to stay

As we've seen, automated dropshipping can provide significant benefits for marketplaces looking to scale faster and more efficiently. By automating time-consuming tasks like supplier onboarding, product data syncing, and order processing, marketplaces can focus on what matters most – growing their business and providing value to their customers.

Looking ahead to 2024 and beyond, it's clear that dropship automation is here to stay. As more and more marketplaces look to expand their product offerings and reach new audiences, the need for efficient, scalable dropshipping solutions will only continue to grow.

In fact, according to a recent report by Grand View Research, the global dropshipping platform market is expected to reach $557.9 billion by 2025, growing at a CAGR of 28.8% from 2019 to 2025. This growth is largely driven by the increasing adoption of automated dropshipping solutions like Canal.

If you're a marketplace founder looking to scale your business faster and more efficiently, now is the time to explore automated dropshipping. With platforms like Canal, you can streamline your operations, reduce manual errors, and provide a better customer experience – all while freeing up time and resources to focus on growth.

So why wait? Sign up for a free trial of Canal today and see how automated dropshipping can help take your marketplace to the next level.

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