In this episode, we will discuss the complexities of implementing dropshipping into an existing ecommerce operation. Our featured guest on the show is Travis Mariea, CEO of flxpoint.com.
On the Show Today, You’ll Learn:
- What is the current state of drop shipping, and how has it evolved.
- Why is it the best time to start drop shipping in 2023.
- What are the complexities involved in running a successful drop shipping business.
- How to manage the integration of different suppliers and technology platforms.
- What role do APIs play in simplifying data exchange between systems.
- How to source the specific products wanted in drop shipping.
- What challenges do retailers face when dealing with product overlap in different warehouses.
Links & Resources
About Our Podcast Guest: Travis Mariea
Travis is the CEO of Flxpoint, a dropship and distributed order management platform built for connected commerce. Travis has been in the ecommerce industry for over 10 years leading multiple software and service companies. He is an advocate of the distributed fulfillment model and passionate about empowering merchants to compete in the rapidly evolving retail industry.
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Claus Lauter: Hello and welcome to another episode of the e commerce coffee break podcast. Today, we want to talk about dropshipping with me on the show. Today. I have Travis Marie. He is the CEO of flexpoint. com a dropship and distributed order management platform built for connected commerce.
Travis has been in the e commerce industry for over 10 years, leading multiple software and service companies. He is an advocate. Of the distribution fulfillment model and passionate about empowering merchants to compete in a rapidly evolving retail industry. So, let's dive into the topic of dropshipping.
Hey, Travis, how are you today?
Travis Mariea: Hey, good.
Claus Lauter: Thanks for having me. Great to have you on the show. Travis, dropshipping, why?
Travis Mariea: It's an amazing fulfillment model. there's been a lot of different approaches to it as far as there's China, the U. S. There's the internal kind of U.
- Based approach. There's a lot of different ideas about it out there. The big thing to think about when it comes to drop ship is it sounds so great at the surface because there is a lot of efficiencies in the actual model, if it's done, right. In general, it's been tough to get it going because there's a lot of integration heavy kind of work that is involved.
But in general, right now, drop shipping is really picking back up. And I'm not talking about quit your side job. Or I would start a side job, quit your 9 to 5 kind of that the drop shipping where it's this live on an island kind of scenario. we deal mostly in drop shipping where it's a fulfillment model for an established retailer or someone that has an audience in general, maybe not a retailer, but an influencer, whatever it might be, but has an audience has a differentiated kind of brand, for that type of company.
It can make a ton of sense and, it's some of the best time to start drop shipping. You've got direct to consumer brands that are great, that have their own Shopify store on a big commerce store, wherever it might be that you can easily plug in with systems like, like whether it's Zapier or like.
An order management system built for Dropship like ourselves, Flexpoint whatever it might be, you can easily connect to a partner network of Dropshippers. And so right now it's really been interesting to see, the new players getting into the space because it doesn't require as much technical overhead as it has in the past.
So it's been interesting to see that.
Claus Lauter: Yeah. Thanks for clarifying. We're not talking about what was a hype a few years ago, become rich overnight with AliExpress dropshipping. These things and this kind of dropshipping is definitely nothing that I would recommend, but dropshipping as a business model has been around for a very long time.
And I agree a hundred percent with you moving to DTC dropshipping. Done the right way, and we will dive into this now is still a great business concept. Now it can become relatively complex. If you're running a store, you have different suppliers different technology platforms.
And I understand you at FlexPoint, you're helping in basically clearing this up, create clarity and helping with the processes. Tell me a little bit about the complexities behind running a dropshipping
Travis Mariea: business. Sure. Yeah. Let's say, you're typically just shipping something out of your warehouse, right?
You're a DTC brand or a traditional retailer that you've had a brick and mortar or your own warehouse. You're used to physically having these items and maybe just a small catalog because you're not building out a large catalog. It's usually a price prohibitive to do that. But when you start drop shipping, a lot of times you're dealing with a larger catalog because you can, because you don't have to own the inventory and you don't actually own it.
So you don't physically have it. So that means things like Images titles, descriptions, like, how do you actually decide what to call it? How to describe it? How to get the imagery? Just getting the products up onto your website in mass, usually, like I said, it's more than just 1 or 2 that adding, at least in our model, in the traditional retail model,
so you're dealing with Whether it's a file or an integration need there and getting it up, categorizing it properly. So to start, that's a piece of it. Once you get your product catalog onto your website, you then need to sync inventory. Working with your vendors to understand where do they maintain their accurate quantities.
So you don't sell something they don't have in their warehouse that they cannot ship for you. As I was saying earlier, you need to build a good brand. It's not Aliexpress just flipping. Customers never having them come back. You need to be still building a good brand. And with that, you need to have a good fulfillment experience.
And so with that, you got to make sure that you're not selling things that are out of stock and you're fulfilling orders when people buy them on your website to build your brand onboarding vendors. In general, it's something that you should be thinking about. And you need systems like whether it's a flex point or any kind of.
Software out there that helps you onboard these vendors to get the catalog in, to sync the inventory, to manage how many vendors you have in a queue, how many that you've, already signed agreements with how many that you've integrated with. So just that whole piece of it, that's all just getting started, right?
There's some complexity there and why there's software out there that focuses just on that piece. And so once you get going, that's, you get your vendors up, you're going, you start getting orders in. You do need to be thinking about, okay, an order comes in. It has one of my branded items on it, and it also has a drop ship item on it.
How do I split that off, appropriately? And then how do I make sure that experience is good, whether it's coming in two boxes or whether you're bringing it into your own warehouse first, what we call cross stocking and bringing that in first and then sending it all together. If you have high enough margins, it can make sense to do that in some industries.
So it's thinking about those complexities and how you want to handle them. And one of the most complex areas that we handle is in the retail world where you might already be buying wholesale from brands. Say, I'm an outdoors company and I sell fishing rods and I'm currently buying those wholesale and storing my whole warehouse and I'm sending them out.
If I also dropping that exact same fishing rod, how do I map that across multiple systems to say this fishing rods in my warehouse? This one's also in another warehouse. How do I get that up to my site as one product listing with an accurate quantity across those two separate warehouses?
And one I don't own, right? It's a drop shipper. And when an order comes in, sure, maybe it's as simple enough as saying, I just want to always fulfill my warehouse. And then if it's out of stock, go over to the drop shipper and fulfill it there. But we have clients that say, you know what? No, if it's in California, fulfill it directly from the drop ship because I can't fulfill it for the same cost, right?
Or I can't get there in quick enough time, or if it's international. So there's all those complexities where systems like FlexPoint. Come in and we what we call product overlap where you have the exact same product in multiple warehouses, third party and first party. So it's really just a game of data integration, data management, whether it's inventory product or order data.
Claus Lauter: was a great overview of what. Basically dropshipping to different kinds of scenarios that you can work with. I like that. So now once you have found a vendor supplier for the products that you want to sell in your store, obviously they all have different technology platforms. Tell me a little bit about the integration of whatever they can provide when it comes to the data exchange to your platform.
That might be Shopify. That might be BigCommerce, wherever you're on.
Travis Mariea: Yeah, exactly. So it's all about integration, right? And that's the main piece. When you're working with a dropshipper to have that good experience, you need to have your two systems talking. And traditionally EDI was the way you integrated via dropshipping.
And for those that are not familiar with EDI electronic data interchange, it was built to replace the fax. That's how old it is. And it was literally just this non human readable files that were translated. Interesting enough, it's still used by most of the large players, Walmart, Amazon, Target, all the big retailers still a lot of times require EDI.
Because they built their whole system infrastructure around it but it's very tough to implement. It's very fragile. It's not a standard like it might sound. It can differ from retailer to retailer. It's very time consuming to set up. So at the very base level, that's how people started integrating from a retailer to a supplier.
And then moving on to integrating drop ship as well between that retailer and that supplier. Still around today, but that's kind of at the base level. The one you want to avoid 3 months set up. costly, things like that. It slowly evolved to, and you see this today a lot where there's CSV files that are hosted on like a Dropbox location or an FTP to provide live inventory.
And there's custom scripts written that, lot of entry level developers can write a script to update a file. So it made things a little bit easier. They're human readable. It's simplified kind of that EDI process of transferring files, but still wasn't great. We saw the rest API really bring things forward a lot further in that with good documentation, it's a very efficient way to translate data back and forth between two systems.
And so the rise of the API has really kind of been a game changer for. Integration as a whole, but it still requires a developer and you need good developer to make sure that they can properly lead to read the documentation, integrate, deal with rate limiting, deal with pagination, things like that.
But it still required developer where we're at now, why I'm so excited about drop ship and the integration between partners and commerce. Is that we've got these connectors that say, you don't have to be developer. We've already built all these prebuilt integrations to every open API system that is out there, Shopify, BigCommerce, any new software has been rolled out, has an API in most cases.
Everyone probably on your podcast, a good bit, probably know about Zapier, right? And that's a great example of an iPaaS integration platform as a service that helps you just integrate more as commerce focused ones like Soligo out there and Alloy and things like that. What we did with Flexpoint is because we're focused on dropship, we built an order and inventory management system with an iPass built in.
So now when it comes to integrating your vendor, who's on Shopify, you just haven't installed a Shopify app you automatically are pulling in product data, automatically syncing inventory, automatically sending orders and tracking information back and forth. No developer, no custom code for those that are on Shopify on big commerce.
We even have them with open source platforms like Magento and WooCommerce. Things like that. What the big hurdle was. When integrating with drop ship suppliers was how do we integrate? Who's going to write it? Do I have a developer doing out of developer? How do I deal with EDI now? Today?
It's I'm on Shopify. You're on Shopify. I'm on big commerce. You're on Magento. It doesn't matter. Just use a system like flex point or any other kind of iPass out there to easily connect with your partners essentially, and start working together.
Claus Lauter: Okay. No, it makes perfect sense. And obviously that helps a lot.
I remember the times dealing with CSV files and it was a pain in the neck. There were so many errors in there. That's not a good experience. Now, when you work with a partner on the other site and you only want to source, I don't know, certain product ranges and, synchronizing the stock and all of that.
How do you keep control from your site that you really only source the products that you want to have and so
Travis Mariea: on. Yeah, that's a great question. And I can tell you've got experience in here, right? Just be able to dive in there. Or at least have heard of, the complexities there. So what we do with FlexPoint specifically, because we are in that, the business of building out a larger catalog, not the one skew kind of drop ship AliExpress thing, but like building a larger catalog to bolster your brand online into.
Build an experience on your website. So you're dealing with a lot of products that are available to you. We have two screens, really three, but two that mainly matter where you can see the entire product feed. So whether you're integrated via CSV file or ADI or an API, like still has to happen for some of your vendors that require it, or you've connected to a Shopify store.
A magenta store, whatever might be all those products are brought into a single screen and from there you can look through that search through that and then move them to a catalog have them available for your store. And we have a multi channel catalog as well, we've built specifically the IMS and the PIM tooling within our system to say.
Here's all it's available to you, right? With rich imagery and titles, inscriptions, and custom fields and attributes that you can easily filter, and then you can select those products in our user interface and say, list that to Amazon, list that to Shopify, list that to both Amazon, Shopify, Walmart, and my other big commerce store.
So we give you those screens to manage them in one spot. Okay.
Claus Lauter: That sounds like an amazing feature. Something that should make merchants life much, much easier now when it comes to getting the information after the purchase and after delivery. So we're talking about shipping details, tracking info and so on and so forth.
Is that also something that you pulled from the vendor and basically forward to the customer?
Travis Mariea: We do. And that has been, I believe. That's a big piece of the efficiency that we add is, we have a lot of customers saying we receive an order. We, a lot of times we have to manually send the order to our vendor, right.
And we help with that piece, but the biggest one was always, okay, I might be able to automate like an email PO or something, but getting the tracking back up to my store was always tough. So yes, we do help in that full cycle, not only from what we call left to right is getting the products up, listed and synced.
And then right to left, which is the orders down to your vendor and then back up the shipping tracking to your customer. And nowadays we'll update the order status and big commerce and Shopify specifically, I can think off the top of my head. We'll push the tracking up, we'll mark the status as shipped.
And then all that normal communication will come from your Shopify store with your branding, with all of your. Proper kind of messaging that you've had for any other order.
Claus Lauter: Do you have any other kind of integrations that are exotic when it comes to running a store for, I don't know, specific industries or niches?
Travis Mariea: Over the years there's a lot of integrations that are not as plug and play because the distributor, the vendor. The brand, whoever it might be, has a prebuilt system that requires a custom integration. On top of being an order and inventory managed system, we have a full integration team.
It was a dozen developers constantly working on integration. So we have about 190. 495, I think is where we're at right now. prebuilt integrations to the large distributors in the auto parts space and the furniture space. There's a ton of other industries that serve where, we have plug and play distributors built into our system where you don't have to go hire developer and they're ready to go 1 click process of loading their products in.
Claus Lauter: Okay. Now, you're obviously talking to a lot of vendors out there.
Do you see some specific trends or industries where dropshipping is really picking up right now compared to a year or two years ago?
Travis Mariea: , I think traditionally it's been big in those markets I mentioned, the industries that automotive, even in the firearm, adult space, furniture, where, there's these big distributors that exist that have prebuilt feeds and easily connect.
I will say that Dropship is becoming more and more popular in this new influencer ecosystem where we have people on Tik TOK and Instagram and things like that, where, even though apparel is high return rates and there's sizing issues and things like that, and less margin in a lot of cases.
If you have an audience and you're not a traditional retailer, you're not used to commerce dropship, it can be a quick, easy way to get going. And so I think these little niche markets if that influencers can tap into are starting to open up opportunities for dropship. I heard of there's a local guy here that has like a rubber stamp.
Company from back in the day, we have rubber stands for your name and things like that, where he's got 1 influencer. I don't know, or just showed up and starts sending them dozens of orders a day. They get a couple 100 and like, big days, whatever it might be, , where he would have never expected that as their business is pivoted to something else completely.
But he's getting these orders that. Someone tapped into this weird niche market on TikTok, and now he's getting dropship orders from. So I think if anything, we're seeing more of a distributed kind of approach to all these little markets you can tap into because of the influencer economy. Okay. That's a very
Claus Lauter: interesting insight.
How does the onboarding process look like with FlexPoint? What's the
Travis Mariea: timeline there? Yeah, with us it could be very quick depending on the complexity. We've had people sending orders within a couple of days, 3 to 4 days. we've also had large implementations where you're bringing on 10, 15, 20 vendors is what you want to have on it before you go live.
And so that can be like a 90, even to 120 implementation. If you're bringing on catalogs, you're commuting with vendors. I'd see on average. We're looking from like a 30 day to 90 day experience getting up and going. If you are an established retailer with an established store and you have multiple vendors you want to bring on board, there's a project management piece to it.
Claus Lauter: Okay. That brings me to the question. Who's your perfect customer? Yeah. Our
Travis Mariea: perfect customer for FlexPoint is retailer that has established vendor network. That is looking to automate more of their business that they do today. Manually. Ideally, they're doing at least 3Million to 5Million dollars GMB annually shows that they've got an established business and have got past the manual side of things.
so, you know, SMB for sure, but definitely we're leaning towards mid market, but anyone that has. Drop ship component or wants to add a drop ship component, to automate more of what they're doing already online. We have another brand. That's a little bit more SMB focused inventory source dot com that's really anyone that's just getting up getting going you can be live in the matter of a couple of hours by integrating with that prebuilt network.
I mentioned that kind of focus is there where flex point is really looking for the more established, Retailer looking to automate what they're doing manually.
Claus Lauter: Okay. Give me a bit of an overview on the pricing structure. How does that work?
Travis Mariea: We're roughly 800 a month.
A lot of times we are looking for annual contracts and annual payments. But we do have options to go down the monthly when it makes sense right now. Our theme today mostly manages the kind of the sales pricing and things like that. However, we do have a light version of our app coming out where it's going to go back to that, you know, you can buy it on the website, roughly 700, 600, 700 a month, will be that price point.
Because inventory source is our sister company, very similar, a little more SMB. That's at 99 a month. Flex points really for that more serious retailer.
Claus Lauter: just taking into consideration how much time it saves you and probably the level.
Be very low compared to do it manually. that's a no brainer. Before we come to the end of the coffee break today, is there anything that you want to share with the listeners that we haven't covered yet?
Travis Mariea: as an advocate of the dropshipping model, I think everyone has their preconceived notions of it because of a YouTube video they've seen or an experience they've had.
I always like to remind people that it's a very powerful model if used correctly. It's 1 of those things to, I say, keep your eye out for in the future because it's easier and easier for partners to work together.
I think you're going to see it more and more. And then at the same time, never realize it's happening as well. So if you're in the know and you're partnering, you're going to see it from that perspective. But I think it's become more and more seamless. And you're going to receive a package that was dropship that you had no idea was dropship.
So I think that's, it's really exciting
Claus Lauter: for us to see that happen. Yeah. We're on the same page there. If it's done professionally and with the right tools, it's a great experience for everyone. Cool. Where can people find out more about you guys?
Travis Mariea: Yeah, just flexpoint. com. It is F L X no E. So F L X P O I N T.
com. You can check us out there. We have a team ready to talk you through it. Live chat, all that kind of stuff as well. So happy to talk to you there. I'm always happy to engage with you on LinkedIn. You can find me Travis Marrier, M A R I E A. As well,
Claus Lauter: I will put the links in the show notes as always, then you just want to take away Travis.
Thanks so much for giving us an overview of what's happening right now in dropshipping. And I hope a lot of listeners will check your website out. And I think it's a great system to make your life easier. Thanks so much. Awesome. Thanks.
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