Enterprise Drop Shipping, Part 5: How to Manage Product Catalog Data

This is my fifth article on enterprise drop shipping. The first four installments addressed the basics. This month, I’ll begin a series of deeper dives into how to handle the various data needs and flows of a robust drop shipping operation. In this post I’ll start with catalog data.

Drop shipping requires that the seller-retailer use data to have a virtual representation of a physical thing that they will not see or control. Therefore, almost all retailers that embrace drop-shipped products start with one of the fundamental pieces of data: the product catalog. This is logical and necessary, as you can’t sell product without it. But it is also the step that is the most challenging and must be handled differently than the other two pieces: inventory updates and order exchange.

Product Catalog

Say I found a supplier, perhaps a niche manufacturer, that says that it will (a) hold inventory of its products on my behalf, (b) let me sell those products virtually through my ecommerce site, and (c) fulfill the products directly to my end customer. Now all I need is the supplier’s virtual product catalog to plug into my ecommerce storefront and I’ll be off and running.

But what, exactly, is a “product catalog”? Here’s a list of the basic data of a product catalog that a supplier could provide to its resellers:

• sku. Stock keeping unit.
• title. The title of the SKU. A common practice is to combine this data with other fields (such as manufacturer and brand) to end up with a more complete title (e.g., “Lenovo ThinkPad T410 Notebook”).
• quantity available. The quantity available for order. The amount in the supplier’s warehouse ready for shipment.
• cost. The wholesale price of the SKU.
• product. A group identifier that supports item options-variants. For example, a t-shirt in 3 colors and 5 sizes could be structured as 15 SKUs grouped together as one product. Data such as cost, quantity, and title is always associated with a SKU and not the product. Product is just a grouping of closely related SKUs.
• category. The category the SKU is assigned to in human-readable format. If categories are hierarchal, the relationship between top-level categories and subsequent leaf (detail) categories needs to be represented.
• description. Full description that describes the SKU. HTML is generally used.
• brand. The brand or manufacturer of the SKU.
• map. Minimum advertised price.
• msrp. Manufacturer’s suggested retail price.
• mpn. Manufacturer part number.
• upc. Universal product code.
• length. The length of the SKU-item.
• width. The width of the SKU-item.
• height. The height of the SKU-item.
• weight. The weight of the SKU-item.
• handling cost. The handling cost or fees that will be added to the order when this SKU is fulfilled.
• product attributes. Possible attributes could include “color,” “size,” “rating,” “genre,” or “publisher.” Attributes can be used in place of, or in addition to, product variant groupings, as explained above.
• product images. The SKU’s product image(s).

Not all suppliers will be able to provide all of this data. The list above represents the most critical components, those that a retailer needs to sell the product to a consumer.

Catalog Process

The process of capturing a supplier’s product catalog is complex. By comparison, for the inventory update process — which I’ll address in my next post — you only need a SKU and “quantity available” fields. The good news is that the catalog process is one that can and should happen infrequently. Think about your favorite brand, perhaps The North Face, for example. How often does The North Face introduce new products or update product lines? Maybe twice a year?

Some suppliers could have a faster product lifecycle, but an extreme view would be monthly. This means the catalog process should be considered as something that is done rarely and possibly not needing automation. A huge mistake retailers often make is to try to deal with frequent full updates to a catalog when what they really need is only a full catalog import initially and then an automated inventory update process afterwards.

Curation

As I covered in “Part 4: Winning Strategies,” most retailers that are successful at drop shipping curate product catalogs. They do not simply accept the entire product catalog from a supplier and spray (and then pray) it to all of their shoppers. There are several benefits retailers glean from this:

Product Uniqueness

Significantly enhancing supplier-provided data allows retailers to make their version of the product unique. In ecommerce, where a large portion of products are sold across multiple retail sites and marketplaces, it’s important to make sure your offerings stand out from the crowd and represent your particular selling proposition. Putting time and manpower into curation and product data enhancement is the only way to accomplish this.

Improved SEO for Your Product Offerings

Without a curation and product-catalog-improvement process you cannot really have a search engine optimization strategy for the product detail pages. This also means you run the very real risk of being penalized by Google because your product detail pages exactly match other sellers that use the same supplier data without changing it.

Product Information Optimized for Your Customer Base

Another reason to have a curation process is that the data you receive from suppliers will be varied in how appropriate it is and how well it matches consumer expectations. Most suppliers still receive 90 percent of their orders from retailers buying wholesale through traditional channels, such as industry trade shows. So the catalog data you receive may have been written for expert retail buyers. There’s a huge difference between a list of product features and a description of product benefits.

For example, I took this product from a supplier feed at my company. It’s the Weber 1211001 Jumbo Joe Gold Charcoal Grill.

Here is the supplier-provided product description:

“Porcelain-enameled bowl and lid with a cooking area of 240 square inch

18.5-inch diameter plated steel cooking grate

Rust-resistant aluminum dampers and ash catcher

One glass-reinforced nylon handle

Assembled dimensions 19.75-inch by 20.5-inch by 19.75-inch

Weight 22 lbs”

That is just a list of features. It’s not a description for a consumer. The consumer needs and wants that information. But if I were trying to sell this grill, I’d start with the supplier data and then add something like this:

“Jumbo Joe Gold Charcoal Grill is our largest portable charcoal grill that we sell here at Jeremy’s Insane Backyard BBQ Equipment. It features the classic porcelain enameled bowl and lid, plated steel cooking grate, rust-resistant aluminum dampers and ash catcher. Wear your sunglasses while you’re grilling because this grill SHINES! It boasts 240 square inches of cooking space — enough that you can throw on a steak for me (let me know when to be there). It’s easy to transport with our Tuck-N-Carry lid lock that also doubles as a lid holder. Tailgating, camping, fishing, or used at a picnic, this grill will help you create great meals and great memories.”

Such a description of benefits and use cases is much more likely to get customers interested in purchasing your product than a simple list of features and dimensions.

Categories and Attributes

Shoppers like products that are related or similar to be grouped together. There are different ways to do this. The most common way is by grouping them together into categories or to use defined product attributes (like color, size). Even B2B catalogs and trade events group products. Attend the Consumer Electronics Show in Las Vegas, for example, and you’d find all the solar powered products and companies grouped together in one area. In the retailer and consumer world it’s the same. Walk into a Walmart. Look at the big signs overhead. They are the equivalent of top-level categories on an ecommerce site. Walk to a row of products, and look at the end cap signs on the shelves. They are similar to leaf categories.

With drop shipping, most suppliers can and will provide their products grouped into their categories. Your challenge is to take that organization and get the products underneath assigned to a list of categories you want for your consumers. It gets complex when you add in dozens or hundreds of other suppliers, with different category structures to the process.

If the supplier has a very specific category structure and you have a more general one, you can map from one category to another, such as the following.

Supplier Category: Lawn/Garden > BBQ > Grills > Charcoal —> Retailer Category: Back Yard > BBQ

All of the products from the supplier that are associated with “Charcoal” are easily dumped into the retailer’s “BBQ” category.

If however, you need to split products, or you have specific categories and the supplier has broader ones — a very common occurrence because product groupings are often driven by experts doing business with each other — then you have to use a product-by-product category map and assignment.

Supplier Category: Sporting Goods > Tents —> Retailer Category: Backpacking > Tents > 4 Season

In this case, the supplier has dumped all tents into one place: “Tents.” But the retailer needs to only get the tents that are for backpacking and for four-season camping into its “4 Season” category. So the retailer can’t just map products over by category. It has to go product by product, inside of Tents.

This is another reason that successful retailers curate products and handle product catalog data (and the process of onboarding a supplier’s products) much more manually, with higher touch points.

Is Automation Worth It?

Curation, enhancement, and mapping of supplier catalog information mean that at some point in the item setup process the retailer is going to have to bite the bullet and get actively involved outside of any software or logic tools they use for standardizing and onboarding catalog data. That’s why it often doesn’t make sense to pay large sums of money for flashy item setup automation software, when you’re going to have to eventually customize the data for your customers and website anyways. A better bet might be to invest in a more manual process that assures the quality of the catalog data on your site. We’ve taken these principles into account in the development of our own item setup engine at Dsco.

Success

Enterprise retailers who deal with hundreds of suppliers and huge numbers of SKUs (tens of thousands and higher) often use Product Information Management software to help deal with these complexities. But I suggest embracing the idea that less (automation) can sometimes be more, and manually creating enhanced catalog data is much better than simply utilizing supplier provided catalog information. Product catalog imports do not happen every hour of every day. Allocating some time and energy (and money) to manage these virtual products is still far less expensive and risky than having to actually buy them up front and will give you much more bang for the buck for all of the data associated with your products.