Drop Shipping










The kind of supply chain management method in which the retailer who takes the orders from the customer does not directly supply the product, instead other retailers or wholesalers are employed for the task of supplying these goods is known as Drop Shipping. The method is such that the drop shipping retailer would keep images or display items of the product to be sold in an online portal or hard copy catalogue. The supplying retailers/wholesalers would then deliver the product to the customers with the tag of the company which has claimed to sell them.
Methods such as these, enables small-scale retailers to receive large orders and ship them without much complications. While supplying the product, these retailers use the packing slip, and other details of the seller company.
Drop shipping methods are usually used for expensive products. Online based auction sellers also use drop shipping as a method for avoiding stocking and shipping of products. In the past few years, there has been much development in the drop shipping segment. More of such business have started coming up in parts of china, where they offer drop shipping for companies as well as individuals. The role of the Internet in e-commerce is one of the primary reasons for this development. Such trade methods have said to reduce trade barriers and improve logistics. The payment for Drop shipping is such that most of the retailers make profit through the retail and wholesale price difference, while it is also paid as percentages of commission to retailers from wholesalers.


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