Suppliers who drop ship for online retailers
build ‘buyer remorse' returns into pricing

Heath E. Combs -- Furniture Today, January 28, 2013

HIGH POINT - Manufacturers and importers that start drop shipping for online retailers better have buyer remorse built into their pricing structure.
     If not, they'll get bitten, said Brian Sprinkles, national sales manager at casual dining source John Thomas Furniture, adding that returned items rarely come back as they're shipped.
     "Nine times out of 10, by the time it gets back to us it's ruined. The packaging wasn't done correctly or it gets mistreated or mishandled and now we have a non-saleable product," Sprinkles said.
     Good packaging even for in-transit goods is a must because handling by carriers is rough, he said.
     Suppliers that drop ship for online sellers are facing problems that brick-and-mortar stores may once have shielded them from. For instance, minor flaws in merchandise that a brick-and-mortar retailer would touch up before delivery become an "insurmountable problem in many cases with the online consumer," said Monty Sihweil, executive vice president of sales for accent furniture source Butler Specialty.
     "It doesn't come back in saleable condition. So we lose the cost of the product and the cost of the freight that we're crediting a retailer back for. So damage is a downside or a negative to doing business with an online retailer," Sihweil said.
    He said that has led to greater scrutiny of product engineering and packaging to reduce likelihood of damage or problems once the merchandise arrives in the consumer's home. Carriers are also scrutinized more closely, he said.
     It benefits suppliers to show online retailers they want to prevent problems and make sure customers are satisfied, Sihweil said. Consumer satisfaction scores are one benchmark by which online retailers judge suppliers, he said.
     One of Butler Specialty's goals is to ship quickly - since consumers give more favorable comments when they get items faster.
     "We on some level consider our customer's customer our customer by extension," he said. "We're doing a lot of that legwork, even though we might not be talking to the end consumer."