A commissioned Total Economic Impact study conducted by Forrester Consulting on behalf of CommerceHub used their independent research methodology to determine that implementing the CommerceHub drop-ship platform resulted in a 461% return on investment and a payback period of less than 3 months. Forrester interviewed four CommerceHub customers that had fully operational in-house drop-ship programs or had initiated such programs, to determine their findings.
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Forrester based their Total Economic Impact (TEI) framework on a composite business in North America, a multi-category, large format store with annual sales totaling $20 billion, of which $4 billion comes from ecommerce. Forrester found that an organization based on the interviews with CommerceHub’s customers, experienced quantified benefits that include:
- Product assortment expansion of hundreds of thousands of products per year
- 99% fulfillment of drop-ship orders
- A 66% reduction in time spent onboarding suppliers to their drop-ship network
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The study’s participants realized additional performance results, including millions of dollars in savings from not having to build their own drop-ship network, opportunities to bolster their networks with vetted suppliers from CommerceHub’s network of 12,000+ suppliers and the ability to quickly scale and meet heightened demand for ecommerce as well as address shifting consumer demands in times of uncertainty. These benefits are expected to have a further impact on ROI results.
“As the retail industry continues to embrace the ‘new normal’ to meet consumer demands, it is imperative that retailers make strategic investments into digital solutions that will mitigate uncontrollable market risks and enable revenue growth,” said Frank Poore, Founder and CEO, CommerceHub. “Forrester’s analysis supports the case for embracing drop ship as part of an overall enterprise digital and supply chain strategy as more sales shift online.”
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