What is drop shipping?

Drop shipping is a supply chain management technique in which the retailer does not keep goods in stock but instead transfers customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer.

This technique has the following advantages for the retailer:

  • - No purchase of goods necessary in advance (low capital commitment)
  • - No financial risk
  • - Outsource logistics
  • - No storage costs
  • - Focus more on marketing and sales
  • - Wide range of products