Practical Ecommerce

Drop Shipping: How to Manage Product Catalog Data

This is my sixth article on ecommerce drop shipping. The first five installments addressed the basics. This month, I’ll leave the installment format behind and discuss deeper topics and trends.

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

Product Catalog

Say I found a vendor, 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 vendor’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 vendor-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 an 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 vendors 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 vendor’s product catalog is complex. By comparison, for the inventory update process — which I’ll address next month — you only need an 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 full updates to a catalog when they really need 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 vendor and spray (and then pray) it to all of their shoppers. The best retailers start with vendor-provided data, and then significantly enhance it to make their version of the product unique in the marketplace.

Data Quality and Audience

Another reason to have a curation process is that the data you receive from vendors will be varied in how appropriate it is and how well is 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.

 

Weber 1211001 Jumbo Joe Gold Charcoal Grill

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 vendor 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.

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

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.

It’s another reason that successful retailers curate products and handle product catalog data (and the process of on-boarding a vendor’s products) much more manually, with higher touch points.

Success

Larger retailers and those that deal with hundreds of suppliers and huge numbers of SKUs (tens of thousands and higher) sometimes look for very specific software, called Product Information Management, to help deal with these complexities. But I suggest to embrace the idea that less is more, and improved data is better. 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.

Jeremy Hanks

Jeremy Hanks

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Comments ( 5 )

  1. Alice Bryony December 24, 2014 Reply

    Nice informative blog of managing product catalog data. Yeah it’s really a difficult job to manage huge number of SKUs, as I am running a Magento based web store and it was difficult for me to manage catalog prices. I searched different software and finally I got an extension (http://bit.ly/1wE5IJv ) named as Magento Cased Based pricing which helped me in managing prices with its cost plus markup formula.
    Usol321

  2. Michael Getz December 29, 2014 Reply

    Very good read! It’s great to find some good content on product data management. This is a big pain for ecommerce retailers in any industry and a common barrier of entry for local retailers hesitant to launch their web store. Would love to hear your feedback on a new service that automatically streams product data to ecommerce retailers in the home furnishing industry called RM Datalink (www.rminno.com). With integration with over 70 vendors, it’s a great way to automate the web store product management role.

    • Jeremy Hanks January 3, 2015 Reply

      Michael, thx for the comment. RM Datalink looks very interesting. I LOVE the category/product focus. I’d love to learn more and compare notes; think you could facilitate a call with you/me/David?

  3. Allison Malone July 20, 2015 Reply

    Thanks for the information, Jeremy. I am new to e-commerce and I just had a difficult situation with my supplier where they were listing products on their inventory spreadsheets, but in fact, had stopped manufacturing them. I found out the hard way when I tried to place the orders- then had to cancel them. Would you suggest double-checking with the supplier for each product you plan to sell before listing? I thought I was all set with my inventory because I had signed up for an app called e-productplug to automate the inventory feed, but then found out some products had been discontinuted.

  4. Beeri Amiel November 3, 2016 Reply

    Great post Jeremy. I found your explanation about the difference between features and description critical, and one that not enough online retailers pay attention to. Creating, finding and organizing product data is an expensive, time consuming bottleneck for many retailers. We just launched our Product Information as a Service platform that provides retailers with complete product information, that is validated for accuracy and customized according to marketplace (Amazon, eBay) requirements. This enables retailers who receive a list of products from vendors to get product information for the entire inventory in a matter of minutes. Would love to hear what you think!