Drop shipping

Drop shipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers the customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer. As in retail business, the majority of retailers make their profit on the difference between the wholesale and retail price, but some retailers earn an agreed percentage of the sales in commission, paid by the wholesaler to the retailer. Drop shipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers the customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer. As in retail business, the majority of retailers make their profit on the difference between the wholesale and retail price, but some retailers earn an agreed percentage of the sales in commission, paid by the wholesaler to the retailer. A drop shipping retailer might keep display items on display in a physical brick and mortar store or provide a hard copy or online product catalog to enable customers to review items before purchase. Retailers that drop ship merchandise from wholesalers can take measures to hide this fact or keep the wholesale source from becoming widely known. This can be achieved by 'blind shipping' (shipping merchandise without a return address), or 'private label shipping' (having merchandise shipped from the wholesaler with a return address customized to the retailer). The wholesaler might include a customized packing slip, including details such as the retailer's company name, logo, and contact information.