In a recent podcast, Jeremy Hanks, CEO of DSCO, a software company, illuminates some of the dropship issues facing omnichannel retailers.

DSCO software, based in Utah, helps retailers and suppliers work together to share information inside of the supply chain.

Among the biggest challenges retailers find with dropshipping is that they think of dropshipping as just another fulfillment method, but it’s really more than that. That means that retailers and their suppliers have to change their mindset and their relationship to one of partnership.

“It’s a completely changed the nature of the historical roles of what retailers do, what suppliers do, and the business models that drive that,” Hanks explained. “Retailers are generally really used to kind of dictating to the suppliers what products they want to have inside of their product assortment, and then dictating all of the business terms and the technology details of how to share data in the supply-chain. And those things carry a lot of challenges in the world of drop-shipping where the suppliers are holding product inventory” and doing “fulfillment to the consumer at the last step of fulfillment process.”

A second challenge is that software solution providers are not aligned with the new mindset. “And so there’s a mismatch,” said Hanks. “I think the challenges all stem from this understanding that this is not just another fulfillment method, this is something completely new, and if you’re going to do something completely new, you probably should consider a different approach to solutions, rather than what you’ve done for the last 30, 40, 50 years.”

Sharing the right kind of data allows retailers to make better decisions about dropshipping while achieving the goal of expanding their product assortment. “Data can help those two sides have better discussions, and then they can make better decisions,” said Hanks.