The focus was on drop shipping to end consumers in the first three posts of this series. This post, the last installment of the series on drop shipping, will cover drop shipping to retail store locations.
Distribution centers, also known as DC’s, play a very important role in the supply chain. They allow retailers to maintain a large stock of multiple inventory items, create regular shipments to retail stores from the distribution center and generally control their inventory levels to the degree they need.
However, while you will often ship to a distribution center, there are times when you’ll need to ship directly to a retailer’s store locations and you will receive corresponding SDQ orders. SDQ stands for Store Destination Quantity.
Shipping to Multiple Locations
Obviously, the largest difference in the shipping process between DC shipping and SDQ orders will be the fact that you’re not shipping to a distribution center, but to one or more retail stores instead. Your shipment will go directly to the store’s receiving staff.
Understanding an SDQ Order
Unlike standard shipment orders that will be sent to a distribution center, SDQ purchase orders have multiple lines designating retail store destinations. For instance, you’ll receive the usual general purchase order header information, and then an SDQ line. Within the SDQ line, you’ll find one or more locations to which the product must be shipped. This allows you, the supplier, to sort orders based on destination location, rather than by product type or other criteria.
This has implications for better efficiency within your own organization, as well as benefits for your customers. By sorting orders by location based on SDQ lines on the purchase order, you can more easily prepare each retail store’s shipment on its own, compare that to the SDQ order lines, and then make the shipment to the specified locations.
Some retailers require invoices to be sent for each store location. SDQ orders help streamline the invoicing process for suppliers in that sales orders and the corresponding invoices can be created per retail store location, rather than per product ordered by the customer.
Streamlining the Shipping Process
Perhaps the most notable benefit of SDQ orders is the ability to streamline the shipping process. Orders sent directly to stores bypass delays at distribution centers and get product more quickly on store shelves. It also simplifies the management of inventory levels at each store.
This is beneficial for your customers in several ways, including allowing them to reduce labor and other costs at distribution centers, as well as offering them significant benefits in the terms of faster door-to-door shipment times.
The Need for EDI
Drop Shipping Part 4 – Shipping Direct to Retailer Stores with SDQ Orders
by Steve Brewer
EDI is by far the most prevalent industry standard solution for drop shipping document exchange between customers and suppliers. Given the need for accurate information transfer, 24 X 7 data transmission, sales order creation and packing slip creation, you must have a robust EDI platform in place. Without the right tools, it will be difficult to keep your customer supplied correctly, either in the case of shipping to distribution centers or directly to retail stores.