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See How CWCollaborate Can Steamline Your Drop Ship Operations and Improve ROI
 
  CWCollaborate ROI Model

To calculate ROI using CWCollaborate software for your business, replace the default values in the boxes below with your data and click the calculate button at the bottom. ROI results for a 3-year period will be shown at right. Roll your mouse over the ? for explanations on values for each line item.
Volume Metrics  
Annual Dropship Orders  # of line items from telephone and web orders which are to be filled by suppliers
Projected Annual Growth Projected annual sales growth %
Number of Dropship Vendors Number of suppliers currently providing dropship services for retailer
% of Orders Automated Currently % of orders currently communicated using EDI or proprietary communication vehicles %
% of Vendors Automated Currently % of vendors currently utilizing EDI or proprietary communications to manage dropships %
 
Order Characteristics  
Avg Order Value (w/o S&H, Tax) The average value of an order's total merchandise price. Does not include Shipping, Handling or Tax $
Bottom Line Impact of Addt'l Sales What percentage of incremental sales will fall to the bottom line. Should reflect COGS and PPS expense, but not Marketing %
Number of Lines/Order # of line items in an average order
Return Rate Percent of line items which are returned for credit or exchange %
 
Staffing and Costs  
Dropship coordination/liason (FTEs) Full Time Employees (FTEs) dedicated to dropship process support today. If this task is shared among many different resources, we have found that 1 FTE per 15,000 dropship orders is a good benchmark.
% of Order Using EDI %
Dropship AP Functions (FTEs) Full Time Employees (FTEs) dedicated to processing/reconciling dropship invoices. If this task is shared among many resources, we have found that 1 FTE per 30,000 dropship orders is a good benchmark.
Avg Communications/Order Average # of calls or emails needed to handle each order (includes original order)
% of Cust Svc Calls WIMO "where is my order?" queries as a percent of total customer service calls/e-mails. %
Customer Service Call Cost Labor and WATTS time for average customer service call $
Returns Processing Costs Average cost of labor and materials to process product return and credit customer $
 
 
               
  View Printer Friendly Page Year 1 Year 2 Year 3
Dropship Orders
80,000 88,000 96,800
     
     
$72,727 $80,000 $88,000
$80,000 $88,000 $96,800
$82,192 $90,411 $99,452
$234,919 $258,411 $284,252
$18,794 $20,673 $22,740
     
$83,334 $91,667 $100,834
$45,833 $50,416 $55,458
$45,938 $50,532 $55,585
$15,120 $16,632 $18,295
$20,400 $22,440 $24,684
$52,603 $57,863 $63,649
$6,000 $6,600 $7,260
$269,228 $296,150 $325,765
 
$31,022 $289,823 $321,505
12 % 56 % 69 %
348
$570,151
       
Incremental Sales
  Expanded Product Selection Expanded Product Selection - CWCollaborate offers retailers the ability to dramatically expand product offerings by eliminating most of the barriers to dropship processing. This expanded selection will result in increases in both average order size and order conversion rates.
Recover Lost Sales Recover Lost Sales - poor customer service as well as inaccurate, inconsistent order fulfillment can cost retailers substantial numbers of customer orders. CWCollaborate offers customers a comparable level of service as they are accustomed to from the retailer's own environment.
Expanded Cut-Off Sales Expanded cutoff sales – The delays associated with traditional dropship methods cost retailers countless orders during peak holiday periods as well as general gift-giving occasions. By eliminating many of the delays, CWCollaborate allows the retailer to reclaim many of these orders.
  Total Incremental Sales
  Top Line Contribution
       
Cost Reductions
Dropship Coordination Dropship Coordination - Typically a retailer will have staff dedicated full or part-time to managing the communication with dropship suppliers on order status, backlogs, quality, etc. CWCollaborate eliminates the need for much of this communication.
AP Reconciliation AP Reconciliation - Typically a retailer will have staff dedicated full or part-time to reconciling the dropshipments to both the invoices and the order status within the host environment. CWCollaborate eliminates the need for most of this reconciliation.
Customer Service Calls Customer Service Calls - Dropships account for on average 4 times as many "Where is my order (WIMO)" inquiries as traditional orders due to the delayed shipments and inconsistent presentation of the order. By shortening the ship cycle, improving collateral, and providing visibility to the order, CWCollaborate significantly reduces these calls.
Intra-Company Shipments Intra-company Shipments - FedExing/Mailing packing slips, pick tickets and manifests between retailer and supplier is a significant administrative expense. CWCollaborate eliminates the need for most of these physical document shipments.
Returns Processing Returns Processing - Handling returns internally which are ultimately to be returned to a supplier is a costly exercise. CWCollaborate allows the suppliers to handle returns themselves - eliminating both the internal processing of a return as well as an out-bound shipment to the supplier.
Improved Collections Improved Collections - Manual communication regarding orders and shipments introduces lengthy delays in the collection of revenue from customers. CWCollaborate speeds collections by providing immediate delivery of the order to the supplier as well as ensuring that shipments are updated as they occur. Retailers benefit from reduced carrying costs of these receivables.
    Reduced Value Added Network Charges
  Total Savings
       
Annual Payback
Annual Average ROI
Payback Period (days)
Total Three Year Savings

Contact CommercialWare today for a demonstration of CWCollaborate and information on CommercialWare’s full suite of cross-channel retail management software.

Commercialware Inc.
Cochituate Place
24 Prime Park Way
Natick, MA 01760

Tel:508.655.7500
Fax:508.647.9495
info@commercialware.com