Partway through 2021, I started researching the prospect of starting a drop-shipping business. I had a successful Amazon FBA business running more or less on autopilot, and I was looking to venture away from the Amazon stranglehold and sell products through my own website too.
Anyone that has looked at the dropshipping industry will know there are a lot of services available. The most important issue for me was a wide range of potential suppliers and products (I planned to experiment across a number of product niches), at an affordable monthly cost.
This research, along with those deciding variables, brought me to Inventory Source. After signing up for their free plan to see what was on offer, I was definitely impressed. It wasn’t long before I was a paying customer, putting their services into action.
What follows is an in-depth look at Inventory Source and my experiences using them to launch my new dropshipping venture in recent months.
Table of Contents
Who are Inventory Source?
Inventory Source was founded in 2003 by Kelly Dyer as a for-profit provider of drop ship inventory management for online resellers who wanted to source their goods from wholesalers.
It is considered the oldest player in the dropship automation system, and it prides itself on providing a dropship automation software that can automatically upload product details from the supplier database, synchronize the virtual retail inventory, and route customer orders directly to the required supplier.
It’s current headquarter is in Atlantic Beach in Florida State, in Southeastern USA. Apart from Inventory Source which is tailored to e-commerce startups and virtual retailers, the company also offers a premium, enterprise-grade dropship and inventory management suite called FlxPoint.
- Related Content: Dropshipping in Europe – The Ultimate Guide
A brief overview of Inventory Source’s Services
Inventory Source is a cloud-based SaaS that operates as an end-to-end inventory management suite purposed for dropshipping, and it features a dropship automation system and a supplier network database.
It is designed to allow an online retail business to use the dropship order fulfillment method to accept orders and deliver the products to the customer/end-consumer, without the need for the retailer to stock physical products, manage inventory, or handle packaging and shipment of products.
This minimizes the operational overhead costs for the retailer or dropship merchant. This dropship automation system is designed to aid the dropship merchant to build a sustainable long-term dropshipping retail business.
Its dropship automation software can automatically upload product details from the supplier database, synchronize the virtual retail inventory, and route customer orders directly to the required supplier.
It also provides multiple sales channels for initiating transactions, processing orders, and closing transactions.
This cloud-based app uses an EDI-based, non-API integration framework to link suppliers to sales channels. Moreover, it features a multi-channel sales platform and supports full product data integration.
Likewise, it provides automatic order processing via its dropship order automation functionality. Besides, it features a catalog manager tool and provides optimized sync and store sync.
Furthermore, it supports dropship aggregators like Doba and US Direct.
Inventory Source provides 3 plans:
- A free directory account,
- The Inventory Automation Plan currently priced at a base rate of USD99 per month,
- The Full Automation Plan is currently priced at a base rate of USD150 per month.
We will explore the full details of each of the plans a bit later.
A way to start a dropshipping
Inventory Source offers everything a small business needs to start dropshipping.
Signing up for the service gives you access to product data integration, dropship order automation, and optimized synchronization of retail inventory.
Its supplier network is made up of more than 230 fulfillment entities, most of them being big-name businesses like Walmart, eBay, Amazon, and Weapon Depot. These fulfillment entities in this network are integrated suppliers, and there are also non-integrated suppliers.
Inventory Source provides a list of reputable fulfillment entities. Even so, for the business to use it, it must have a webstore, hence making this dropship automation software most suitable for online businesses and virtual retailers.
This is evident during the registration process as one is required to provide the website address of the retail shop.
Even so, Inventory Source makes it very easy for anyone to enter the dropshipping business. This is because it requires the person to only have two things – an internet-connected laptop and an e-commerce website to start trading.
As is known, the only two basic requirements for an online dropship merchant are an online storefront and fulfillment entities (who serve as product suppliers), and Inventory Source provides the later. Moreover, this offers an advantage when it comes to scaling.
This is because scaling does not come with skyrocketing costs as the business just needs to increase its marketing efforts so as to get as many customers as possible. Likewise, the increase in order processing efforts that comes with upscaling is handled by Inventory Source.
- Related Content: Wholesale2b Review – My Experience Starting a Drop Shipping Business
Inventory Source in Detail
Inventory Source is basically software built as an inventory management suite with integrated sales channels. This software is maintained, debugged, and updated by the company called Inventory Source.
It is deployed using the software-as-a-service (SaaS) model to clients, usually the dropship retailers. To realize this deployment model, the company owns servers where the software runs and can be accessed remotely via web browsers.
This means that it is software running on remote servers that allow it to be accessed via the cloud. This makes it a cloud-based SaaS.
This software was built for inventory management hence the name INVENTORY in its tradename.
Also, because it provides its clients with a place to source their products – i.e the supplier directory, then it added the word SOURCE to its tradename, hence the tradename INVENTORY SOURCE to show that it manages both inventory and sourcing of goods.
Currently, this SaaS suite offers the range of services that are normally provided by information technology (IT) specialists who work in the SCM department of a business.
In other words, Inventory Source serves as a plug-in replacement of the IT department of the SCM of a retail dropshipping merchant.
This suite is designed to handle both retail sales and provide access to a supplier network contained in its multi-supplier portfolio called the supplier directory.
The sales channel handles multi-sales data transactions. Even so, how can a customer initiate a transaction and have this transaction processed using Inventory Source web-based app?
Sales Channel, Integration, and EDI
Inventory Source provides a sales platform called a sales channel that features a shopping cart, order processing, and payment processing system that allows a customer to select a product, add it to a cart, and then place it as an order and then pay for it.
Thereafter a sales confirmation receipt is received along with a payment invoice and shipping details.
In simple terms, the sales channel is a platform that allows for transaction initiation, order processing, and transaction closing, and this reveals that this platform is designed to allow for sales to be initiated and closed.
This sales channel is provided to the dropship merchant who has registered to the Inventory Source. Moreover, the Inventory Source app has multiple inbuilt sales channels and hence can be described as a program with a built-in multi-sales-channel platform.
Any connection between the supplier and the sales channel of the webstore is called integration. The webstore is owned by the dropship merchant and when one adds its web address to the app, the app is linked to the webstore, hence allowing the webstore to access and use one of the app’s sales channels.
The integration is not done via an Application Programming Interface (API), but instead uses the direct electronic data interchange (EDI).
EDI is the digital equivalent of a paper-based exchange of business information through purchase orders and invoices, and as such, its digital documents are appropriately formatted as a business communique.
As expected, the recipient identification (ID) and Sender ID are included in the EDI messages. There are different types of EDIs and Inventory Source gives the greatest preference to the secure direct point-to-point EDI which allows two business entities – the dropship merchant and the supplier – to communicate with each other directly over a secure communication protocol.
- Related Content: Source of Goods Review – Quality Dropshipping Hub or Best Avoided?
The product data management system used in the Inventory Source app is called the inventory engine. The inventory engine allows the merchant to use EDI integration to access the wholesale catalog of each supplier in the integrated supplier network database.
This is achieved using the EDI configuration of the supplier, as each supplier has its own EDI that uses its own unique communication protocol.
This also shows that Inventory Source supports EDI integrations with all the EDI platforms used by the suppliers in its integrated supplier network.
Equally, this means that when adding a new fulfillment entity to the supplier network, then the inventory engine must be updated to support the EDI of this new fulfillment entity.
This way, the inventory engine can fetch the product catalog of the wholesaler/supplier, and then present it to its clients, i.e the dropship merchant. Expectedly, it endows this software engine with the capacity to expand its supplier database.
Normally, the new product catalog is fetched via EDI from the database of the wholesaler and then imported into the inventory engine in a proprietary data format called the Inventory Source Simple Specification (ISSS).
ISSS allows the app to interact with the different EDIs of different suppliers, as well as import and update their product catalogs in its supplier database.
Therefore, ISSS provides an eCommerce import structure for acquiring information from suppliers. Likewise, ISSS allows for dropship merchants to automatically update their retail inventory if their chosen suppliers update their inventory, and this functionality is called optimized sync.
The inventory engine also allows the dropship merchant to add custom feeds, i.e fetch and import data from non-integrated shopping carts and marketplaces.
This data can be imported in any one of the following 3 data formats: comma-separated values (CSV), text (txt), and extended markup language (XML).
Catalogue Management and the GUI
Inventory Source provides an easy-to-navigate and easy-to-use graphical user interface (GUI) that serves as the interface between the supplier source and the sales channel of the dropship merchant.
This allows the merchant to pick products from the supplier and then add them to the inventory of his/her dropship merchant store (i.e the virtual retail store).
Also, Inventory Source provides a catalog manager tool that allows the merchant to control how the product catalog format of the store is presented to his/her customers.
This catalog manager tool allows the merchant to sort the products in his/her retail inventory into product categories, which can then be filtered according to Brand and Price Settings among other filter settings that a customer can need.
Relatedly, the GUI allows the merchant to update the retail inventory by automatically uploading images, syncing price changes, and updating available product quantity based on information in the supplier database.
As is obvious, the dropship merchant does not need any programming knowledge or coding skills to be able to manage his/her retail inventory.
Inventory Source integrates with more than 25 online store platforms. It also integrates shopping cart platforms such as 3dCart, MagentoGO, Shopify, Magento, Open Cart, Virtuemart, Presta Shop, Zen Cart, and eBay ProStores, as well as Big Commerce.
Moreover, it integrates marketplaces such as Amazon, eBay, Price Grabber, and Overstock.
Inventory Source also supports dropship aggregators like Doba and US Direct. A dropship aggregator is basically a wholesaler who buys products from different manufacturers and wholesalers and then sells them to the dropship merchant.
How to use Inventory Source
1. Creating an Account
The first step is to open an account with Inventory Source. Account opening is done online via the hosted registration webpage.
The user starts by identifying why (s)he/it needs an account by choosing any of the 4 available account options:
- Person – An individual who just wants to evaluate and learn more about this cloud SaaS app.
- Retailer – A dropship merchant who wants to sell products
- Supplier – A business entity that wants to provide fulfillment entity services to dropship merchants.
- Consultant or Agency.
Next, one provides the company/business name, website, official phone number, and estimates of orders per month. Then, Inventory Source approves the account and the user has a working account.
When the user logs in, (s)he is redirected to the hosted app at app.inventorysource.com further confirming that the dropshipping and inventory functionalities are built into an app that is deployed through SaaS.
One can then navigate the user dashboard and choose a supplier and thereafter import products to the retail webstore.
2. Choose a Supplier
Before starting to trade, the user (virtual retailer/dropship merchant) needs to choose a supplier. Suppliers are divided into 2 categories: integrated and non-integrated suppliers.
As expected, integrated suppliers are integrated into the supplier network via compatible EDI. For non-integrated suppliers, one needs to use custom EDI integrations so as to link them to any sales channel.
Even so, both integrated and non-integrated suppliers are cataloged in the supplier directory, which has a total of over 4000 suppliers.
After integrating the supplier via EDI to the sales channel, the product details are imported into the webstore using the FULL UPLOAD button.
This button executes the full product data synchronization functions. In full product data sync, all the product details from the supplier are imported, including images, item names, and product descriptions.
This feature also includes the daily update functionality that updates product information when the supplier makes any update.
This also allows the webstore to be in sync with the supplier’s store. If the dropship merchant uses this method to automatically add new products that the supplier introduces in its (supplier) inventory, then the functionality used is called store sync.
Otherwise, the merchant would need to turn on the NEW PRODUCT ALERTS button so as to know when the supplier has introduced a new product.
3. Order Dashboard
Inventory Source provides a unified GUI-based order management system that is presented as the order dashboard. This dashboard shows order placements and the status of order processing, i.e has the order been processed and shipped, or has it been processed but not yet been shipped.
Once an order has been placed by a customer, the merchant receives a notification e-mail and the order is immediately added to the dashboard pending processing.
The merchant needs to press the PROCESS button for order processing to start. Also, if the order needs to be edited before being processed by the supplier, then this should be done before the PROCESS button is clicked.
If the placed order cannot be processed, the PROCESS button is replaced with the RESOLVE button, which one must click to see what the issue is and then resolve it.
This dashboard also allows the merchant to know the status of the order on the supplier side, i.e has the order been processed, canceled, shipped, or flagged for an error that the merchant needs to resolve before the supplier can approve it.
Similarly, detailed information about the order status can be found under the ORDER AUDIT TRAIL tab.
4. Shipping Mappings – Choose a Preferred Shipping Method
The merchant has the option to choose the preferred shipping method via the SHIPPING MAPPINGS option in the app. This allows the merchant to provide his/her customers with free shipping and accurately priced shipping rates.
This depends on the shipping rates set by the supplier, as some suppliers ship some products for free, while others are charged based on size and weight.
One of the demerits of dropshipping is complex logistics that delay product delivery. This is quite pronounced in inter-country dropshipping where the fulfillment entity and customer live in different countries.
Usually, inter-country trade barriers and existing logistics need to be considered so as to ensure that the products requested reach the consumer.
In Inventory Source, the source of goods is indicated in the details section of the supplier, alongside details about which countries the supplier can ship its products to, e.g, JM Wholesale Limited is located in the United Kingdom and can ship orders to the USA, Canada, and Europe.
This allows the dropship merchant to guess-estimate if the supplier can fulfill the order.
Dropshipping Process via Inventory Source
Inventory Source provides a simple and convenient order processing and back-ordering system, with the customer never noticing or detecting that a third-party (the fulfillment entity) is involved in the transaction. This is because the dropship process is streamlined.
Normally, the order tracking system allows the dropship merchant to acknowledge that transaction has been closed following the delivery of the product to the consumer.
The 3 Service Plans
An important thing to know about service plans for Inventory Source is that each plan is priced per supplier. This is important because if one wants to enroll 2 or 3 suppliers into his/her supplier network, then one has to pay two or three times the base price of the service plan.
There are 2 paid service plans and a free directory account, and they are explained below:
This is free of charge and is designed for people who want to learn how to use Inventory Source for dropshipping.
This plan allows the user to view suppliers and their contact information, preview product feeds, search products, and learn how to become a dropshipping merchant.
It basically provides everything you need to gain an insight into how the system works and the large volume of suppliers and products available.
In many ways, you can use the free directory account to start planning the type of dropshipping store you would like to launch. Once you are ready, you upgrade to a paid plan to begin shipping products.
Inventory Automation Plan
This offers the services in the directory account, along with a merchant account that comes with 230+ pre-integrated suppliers and 25+ platform integrations.
Likewise, it allows one to auto-upload product data and provides an optimized inventory synchronization system.
It also comes with bulk feed management tools.
This offer features all the services provided in the inventory automation plan, along with 1-clock order processing and auto-synchronization of shipment tracking.
It also provides multi-supplier split order routing which means that if a consumer submits an order that has different items that need to be sourced from different suppliers, then the order is processed in the app and then each item is back-ordered through its respective source supplier.
As expected, this plan comes with an order management interface. In this full automation plan, once the customer places an order, it is processed and routed to the respective suppliers.
Once these suppliers have processed the order on their end and packed and shipped the items, they send the details via the app which then sends the shipping details, including shipment tracking, to the dropship merchant and customer.
My experience using Inventory Source
If like me, you are launching a webstore without an established audience (this was a new venture) it will be difficult to make any sales without regular traffic to the website.
To overcome this I used targeted traffic using Facebook ads. I also reached out and paid some Instagram influencers to promote one of my main product choices. With these tactics, the first orders started coming in back in March.
With the number of orders being slow at first, it gave me the opportunity to get to grips with Inventory Source and how everything worked.
Everything was set up correctly, and with one click the sales were going through to my supplier for processing. It really was working more or less on autopilot from the very beginning.
In fact, I now spend much more time on managing Facebook ads and my business Instagram account than I do the actual sales processing.
Inventory updates are taken care of, with my webstore only showing products that are available. When it comes to updating with new types of products (I do like to experiment with new stock), I simply remove items from the list that I don’t wish to dropship and add the ones that I do. The app populates the website with relevant changes.
In fact, as I describe the process I love the service even more. You actually begin to take it for granted how much is being automated when it comes to running a dropshipping business through Inventory Source.
- Related Content: Payhip Review – My Thoughts 3 Months in and Starting to Sell
Inventory Source vs The Competition (Wholesale2B, Dropified & More)
SOURCE OF GOODS
BEST ALL ROUND
BEST FOR APPAREL
BEST FOR EU SELLERS
FREE TO VIEW PRODUCTS
(Ship 20 Products/mo Free)
(Free to view, + 14 Day Trial)
17 Platforms Ebay, Amazon, Shopify, Facebook ewCid, XML..
2 Platforms Ebay, Amazon
Platforms inc. Shopify, Ebay, WooCom, AliExpress, GrooveKart
Platforms inc. Amazon, Ebay, Walmart, Shopify, Jet
6+ Platforms Shopify, Etsy, Ebay, Wix, WooCom
9 Platforms Amazon, Shopify, Wix, SquareSpace, Ecwid
(Image & Product Descriptions)
(Image & Product Descriptions)
1 Click Import (with 100+ sites)
NA (Print on Demand)
(V50 Best Interface)
US Based Products & Shipping
US & EU
30 Day Returns
Recommends Refund Policy
GUIDES / TRAINING
Website Learning Resource
Free Video Courses
Website Resources & FB Group
Website Learning Resource
Website Resources & Chatbot Guide
(Upon Removal of Integration)
(Monthly Billing Cycle)
(Monthly Billing Cycle)
(Monthly Billing Cycle)
(Monthly Billing Cycle)
(Monthly Billing Cycle)
DEPENDS ON INTEGRATION $27.99 - $38.99/mo
DEPENDS ON VOLUME $5-$99/mo
Starter Plan: Free
Premium (10 Stores):
$24.99/mo Enterprise (Unlimited Stores): CALL
The free plan on Inventory Source is an excellent way to get to grips with the platform, however, you will need the funds to jump in and enjoy the semi-autonomous (and full-autonomous) features on the paid plans. This might mean that another dropship platform is more suitable for you.
To this end, Vault50 recommends Wholesale2B based on the fact all the major platforms are catered for. It is also a more budget-friendly provider.
Dropified was awarded the most user-friendly drop-ship platform. This is based on their polished platform that is extremely intuitive to use. The learning resources are good too.
Dropified will also be of interest for anyone looking to Private Label drop ship products.
Printify has also scored well. The platform is designed to cater to those looking to dropship apparel as it offers a print-on-demand service. They offer a free plan for starter businesses and have advanced plans for companies with large-volume sales.
Finally, there is Spocket. This is dropship software with a thoroughly modern design. The interface is clean and a pleasure to use and it has great integration too. However, the real benefit of Spocket is that they have EU-based suppliers as well as US ones.
For anyone looking to dropship in the UK or European Union, it is Vault50’s top pick for 2022.
Essentially, there are a number of drop-ship services available. If you do your research into what each of them has to offer, you will find the one most suited to your needs.
The Pros and Cons of using Inventory Source
After several months of using the Inventory Source drop shipping service, here’s my take on the good and bad points: