Ecommerce Lifestyle
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How To Overcome Inventory Issues

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In this episode of the eCommerce Lifestyle podcast, Anton shares how to overcome inventory issues when drop shipping.

  • I was a guest on a friend's podcast when we talked about our time in Chaing Mai and when he started a drop ship store for dance poles.
  • The biggest order he had was over $6,000 for about ten poles from someone opening up one of those dance studios.
  • His supplier said they were out of stock (for a few weeks).
  • What I would usually do in this situation is send them an email and tell them exactly what is going on and if they would like to wait and that I would make sure they get the first shipment.
  • You could also offer replacement items if you sell similar things.
  • If you find yourself constantly in these situations and it causes you to lose money, reach out to your supplier.
  • Talk to them about pre-purchasing some of their inventory per month so they will have a stack of the item with your name on it every month.
  • Set up how much you would put as a deposit to keep them in stock.
  • When your competitor runs into the same issue, this way could help you gain sales by their potential clients moving to your store as you have stock.
  • Go to dropshiplifestyle.com, click on courses and get started. Make sure to check out our "Done For You" option that lets us build your site for you so you can get started even quicker. 
  • Transcripts

    Hey, good morning everybody. Anton Kraly here and welcome to another episode of the eCommerce Lifestyle Podcast from eCommercelifestyle.com. As usual driving into the office. Think today is Wednesday. And I wanted to hop on here real quick. SO I'm already halfway there, which means we have four minutes left, but I wanted to hop on here real quick to share something that came up in a discussion I had yesterday when I was recording a podcast as a guest with one of my buddies, Josh Stanton. You might know him and his wife Jill from their company called Screw the 9:00 to 5:00. I actually have been friends with them, I mean we first met years and years ago. It's crazy, but like probably five or six years ago out in Chiang Mai in Thailand when we were all living out there for about a year, probably we had that kind of overlap and a hanging out doing the whole digital nomad thing.

    But yeah, they have a podcast and they asked me to be a guest on. So we recorded it yesterday and we were talking about obviously my expertise, which is high ticket drop shipping and eCommerce and conversions and traffic and all that fun stuff. But one of the things that came up in the discussion that I wanted to share with you was something that Josh pointed out to me.

    So back in the day again in Chiang Mai, in our Thailand days, he was running a drop shipping store. So we met, told them what I was doing. He built a drop shipping store and he was selling dance poles. So those exotic dance poles. Some might call them stripper poles. But the ones he was selling, I think at least the way they were positioned is for the workouts that people do in their own homes. So I think it still is a trend, but there's like these, I'm doing air quotes here and there, you can't see this, but I'm doing air quotes for fitness studios where people go there and yeah, they they work out.

    So he was selling them and he mentioned that the biggest order that he ever got on his store was for like $5,000 or $6,000. And it was someone that bought something like 10 or more of these things. And they bought them because they were opening one of these studios. And then he said what was so disappointing to him about that order, I mean, on one hand it was amazing because it was a really big order. But then what happened is he emailed his supplier, he said hey, we just got this order. I need 10 of these items shipped to this address, need them there as soon as possible. And then in the supplier said oh, you know what, these aren't in stock right now. We're not going to have them for, I forgot what he said, four weeks, something like that.

    And that hurts because when you're drop shipping, right, you don't normally, this is what the point is, you don't normally have control over inventory. And when that happens, you can run into a situation where you talk to your customer and say hey, we just checked with the warehouse and these 10 dance poles are not going to be in stock for four weeks. Are you willing to wait for this order? We'll be sure you get the first shipment. How would you like to proceed?

    So you can do that. You can offer them a replacement item if you sell anything else that's similar, a few different ways to handle it. Of course, they're all covered in detail in Drop Ship Lifestyle, in my eCommerce training program. So if you're listening to this and you're still not a part of that, go to dropshiplifestyle.com, click on courses and definitely get enrolled. Also check out the Done for You option if you want my team to literally build your site for you. But yeah, that's where we go in depth on all this training. So dropshiplifestyle.com. Click eCommerce courses, you can get enrolled. Or you can apply for our Done for You program where we can literally build it for you.

    But yeah, back to this. What I said okay, here's what I would recommend that you would've done back then in that situation, what I told Josh during our conversation yesterday. I would say if this became a common theme where you were getting orders, maybe they were from studios where it was these bulk orders. Maybe it was just from even just individual buyers. And if you find this to happen with different suppliers where you're constantly in this waiting game of oh yeah, it's going to be two weeks till we get it back, it's going to be four weeks.

    And if that's costing you money because you're having to cancel orders, the first thing that I would do in that situation is reach out to my contact at the supplier, at the drop shipper. And I would say, listen, we like your products. Obviously customers do as well. But this lead time just isn't working. It's losing us money. So what we would like to do is work out a deal where we can pre-purchase inventory that you hold in your warehouse.

    So we still want you to drop ship. We still want to work on the same exact model where you're holding inventory and shipping it to our customers, but we don't want to run into these inventory delays. So what we'd like to do is pre-purchase and fill in number of units here at based on your business and your demand. But we would like to pre-purchase, let's just say 25 units a month that we can guarantee will be in stock with our names on it.

    Now the way we'd like to do this, we know you don't have them right now, but let's figure out what the lead time is from your manufacturer, from your factory. And let's go ahead and we can put down a deposit on these items and pay the balance as they're fulfilled. So by doing this, what happens? Oh, there are three big police trucks outside my office building right now with their lights on. All right, we'll see what's going on in there. Hopefully everything's all right.

    But yeah, you have that conversation with them again. Again, how long you want to, what the deposit is. Maybe you're giving them a 30% deposit to have these items go into manufacturing to have them held for you. Again, the amount of units you want them to hold per month, that's something that you're going to have to talk to them about based on the volume you're selling.

    One key point here, if you're thinking Anton, how am I going to do that when I have no idea how many of these things I'm going to sell, well yeah, at that point you're not doing this. You're doing this after you're running into these supply issues. And then you're addressing it head on this way. It'll mean even, if you do this, it will mean even when your suppliers, I'm sorry, when your competitors don't have access to inventory you do. So that means you're going to get all those sales from people that need things fast. It means you're going to over this waiting game and having to break the news to customers that things aren't in stock. And ultimately what it means is your business is going to be more profitable and you're going to have more money in the bank every month.

    So guys, again, if you want more information on exactly how to do this, what we say, who to reach out to, where to get these suppliers, where to get the traffic to begin with, go to drop shiplifestyle.com. Click on courses, either get enrolled in my coaching program or apply for our Done for You program where we build it for you.

    I am at the office. It seems like everything is cool because the police are on the other side of the building. So I'm going to go in the main entrance and hope everything's good. So hope you all have a great Wednesday, very successful and I will talk to you all in the next episode of the eCommerce Lifestyle Podcast. See everybody.

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