Home > About > Blog

To Drop Ship or Not to Drop Ship

Drop shipping:

‘to move goods from the manufacturer/supplier directly to the
customer without going through the usual distribution channels’

Spoiler alert! To drop ship or not to drop ship? The answer is, if you want to be competitive there is little choice but to offer drop shipping.

As part of the supply chain, drop shipping is probably part of your life. If you are selling exclusively large ticket items with high margins the practice likely works well for you. If you are being asked to ship single items with smaller profit margins drop shipping can become problematic.

Amazon has set the stage for some lofty expectations on the part of customers and the bar gets raised every year. ‘The Amazon effect’ has customers expecting to receive their goods in a few days, with little or no shipping costs and free returns. If you are selling a $5.00 item drop shipping becomes a challenge on a few fronts.

Looking at drop shipping from the financial side of the equation, basic good business logic dictates that you sell to make a profit. Offering drop shipping on low margin items makes it extremely difficult to achieve this. Low margins also mean you have to sell significant volumes to make reasonable profit: This is challenging to do when selling one-offs.

Compounding that, the less profit per sale diminishes the ability to provide customer service effectively. Again, as an offshoot of the Amazon effect, customers have high expectations around the levels of service they expect. By necessity, every order includes the cost of the goods, shipping and invoicing. But you must also account for the need to have service personnel available and a process in place to deal with issues. When the margins are high it is easy to ‘make good’ on problem orders but that becomes a challenge with slim margins.

Adding to this, you need to be aware of the logistics issues around drop shipping. You are very likely dealing with 3rd party logistics providers whose results you do not control. And yet you are accountable to the expectations of your customers.

At Integral Group we see this being played out daily with our customers and we see how suppliers struggle. While we can’t eliminate the EDI cost component of the process, we do offer flat rate pricing that affords you the same costs month over month so you have a better handle on your fixed expenses.

In our opinion, despite the challenges, drop shipping is a necessity in today’s ecommerce market if you want to compete. Like the internet in general, ecommerce is a bit of a ‘wild west’ right now with new rules being established by the biggest guns. Companies are waiting to see what happens, waiting for an equilibrium to be established. We believe that, just as the wild west evolved into a civilized society, so too shall ecommerce.

Please contact Lee Mrkonjic, our Director of Sales & Marketing, if you’d like to explore flat rate pricing for all of your EDI and ecommerce activity.

IN THE COMMUNITY | Spring Bake Sale

On Wednesday April 18th, we hosted the twice annual Integral Group Bake Sale to support Markham Food Bank. The event was a resounding success raising $530 which was matched by Integral Group for a total donation of $1,060. Our thanks to everyone that participated and indulged in the delicious treats.

We heard rumblings (some of them from us) of mysterious weight gain and sugar shock … but people came back for more! Rumour has it that some people substituted these goodies for dinner, because … why not? Our talented team of behind the scenes bakers outdid themselves with luscious creations that we all got to eat in the name of a very good cause.

Our bake sale is a chance for us to do something impactful as a group, to have fun and eat some great food. The tenants at 500 Hood Road in Markham began queuing up as almost before we were set up-and continued until close to the end of the sale window. We want to recognize the generosity of everyone and especially of those who gave a little extra for the good of the cause.

We, and those that attended our bake sale, were full and happy … and coming down from a sugar high! Markham Food Bank can help a few more people in need. A success all around. We look forward to a repeat at the Integral Group fall bake sale in October.

Since 1984, Markham Food Bank has been providing emergency assistance to residents who find themselves in need. Although Markham overall is an affluent community, there are those less fortunate. According to their director, 17 per cent of Markham’s population is poor, having an income of less than $25,000 a year. "Over 21,791 individuals in Markham live in poverty every day, and 22% of those are children." Learn more at markhamfoodbank.ca.

Vision 2020 Update: Integral Group takes a stand!

At Integral Group one of the key principles we live by is that we ‘Elevate One Another’. We do everything we can to create a better work environment. One of our newest environmental changes is adding standing desks to promote the health and well-being of our team members who wanted them.

According to the government of Canada:

  • Canadian adults spend about 70% of their waking hours being sedentary; Canadian office workers spend 77-80% of working hours in prolonged sitting periods.
  • Four out of five Canadians risk developing chronic conditions such as cancer, heart disease or type 2 diabetes; six out of ten adults are overweight.

These are staggering statistics. Although not all disease is preventable, Health Canada goes on to say that “…spending less time sitting and more time standing, walking and engaging in light movement throughout the day can help reduce the risk of developing chronic illnesses like obesity, cardiovascular disease, type 2 diabetes and respiratory diseases.”

A quote from Paul Estey, CIO Public Inc. - “Unlike years past, when cigarettes were the clear enemy of workplace health, the humble office chair has become the new workplace villain.”

The message is clear, we all need to take an active role promoting good health and one way that we can begin is to become more active at work. While we can’t change the nature of the work we do, we can change the manner in which we do it. Instead of sitting in the car, then sitting at our desks for the next 8 hours and then back into the car, standing at a desk for part of the day encourages circulation and movement.

With this information in mind, Integral Group decided to implement a program to offer standing desks to all staff. It was a collaborative process, with a testing phase allowing people to decide if they wanted a standing desk, to propose alternative models and recommend accessories (anti-fatigue mats, dual monitor stands to address reduced desk real estate).

The desks have been in place for about a month now with positive results. When asked to comment on the desks, our team says:

"Sitting for an extended period of time makes me restless. Standing provides a change of pace to the routine. Also, I feel like it puts me in a mindset of actively doing something, which I feel helps me stay concentrated. Sitting can turn into slouching over time when you get comfortable and I think it reduces my productivity.” … Lakshan

“I love the desk as it does not limit my movement. When I am on the phone/meetings, my brain is wired to function better standing up and moving around.” … Ricardo
“…good for my health, especially to help improve my back-pain problems.” … Andrew
“[The standing desk] keeps me more aware of my posture and I consciously work to stand with good posture vs when I am sitting and naturally slump in my chair. I somehow focus better when standing [and it] keeps me more alert.” … Andrea
“I like my standing desk because it gives me the option to stand. Since I have a lengthy commute, I already spend a lot of time sitting. The desk allows me to move instead of being stationary. Plus, early in the morning, when no one else is around, I can dance a little to music.” … Tanya
Health Canada statistics: https://www.canada.ca/en/public-health/news/2017/0...

Show more posts

Stacks Image 47000

Like what you're reading?

Subscribe to learn more about EDI, logistics and E-commerce.

Integral Group - Your EDI Superheroes®

500 Hood Road, Suite 330
Markham, Ontario L3R 9Z3