Drop shipping is an approach to order fulfillment that frees a retailer from keeping product in inventory. Instead, vendors can rely on the source company, such as wholesalers and manufacturers, to ship these products to the vendor’s customers. This arrangement has a number of benefits that make it a popular option with online and direct-mail merchants.
How Does It Work?
When a customer submits an order, the retailer processes the order and accepts payment, then, according to systems in place, either digitally or manually submits the order to the product source along with payment and customer information. The product is then sent directly from the source warehouse to the customer. All parties are satisfied and the retailer makes a profit from the difference between what the customer is charged and what is paid to the product source.
There are definitely a lot of reasons why a retailer should look into drop shipping, here are 5 to get you started: (more…)