Abstract
The advancement and advent of the fourth industrial revolution have placed considerable pressure on e-retailers to provide products and services faster than ever before. To meet this challenge, retailers and manufacturers are exploring new ways to ensure efficient and speedy fulfillment of e-commerce orders. One approach retailer uses to improve their performance is to outsource their order fulfillment to third-party logistics providers (3PL) or to use a newer technique known as dropshipping, which involves the retailer not holding inventory. Instead, the retailer displays products on their website and forwards customer details to the manufacturer, who then ships them directly to the client. This process allows retailers to free up working capital by moving inventory management responsibility upstream and can benefit manufacturers of high-value, seasonal products. This research analyses the dropshipping supply chain in the South African e-retail industry to understand dropshipping practices, why entrepreneurs choose this order fulfillment option, the challenges drop shipping presents to retailers, and its uptake in South Africa. The study focuses on supply chain concepts, management, and the e-retail industry. It also delves into the core element of dropshipping, a well-computerized system, and explores the technological drivers that contribute to a successful dropshipping enterprise. Data was gathered through ten (10) semi-structured interviews with dropshipping e-retailers, and thematic analysis was used to identify and analyze patterns in the data. The study identifies themes such as challenges, motivational drivers, the e-commerce model utilized, and innovative techniques businesses adopted.
The research sheds light on what motivates entrepreneurs to enter the dropshipping business and the experiences of e-retailers who have adopted this strategy. It shows that there are challenges associated with the dropshipping strategy that need to be addressed. The strategies include improving e-commerce infrastructure, conducting thorough market research, identifying high-demand profitable niches, and building loyal supplier relationships. Ensuring the quality of products, prompt delivery, optimizing search engine results, investing in marketing, and advertising, providing excellent customer service, and effective communication are also essential for creating a loyal customer base. Finally, staying current with the latest e-commerce trends and technological advancements can help businesses remain competitive and adaptable to changing consumer demands.
Keywords: Dropshipping, Supply Chain Management, E-retail, Artificial Intelligence.