Drop shipping is a streamlined form of retail business where the seller takes customer orders but does not keep the goods sold in stock. Instead, in a form of supply chain management, the orders and their shipping details are transferred to either the manufacturer, a wholesaler, another retailer or a fulfillment house, which then ships the goods directly to the customer. As such, the retailer is responsible for marketing and selling a product, but has little or no control over product quality, storage, inventory management, or shipping. This eliminates the cost of maintaining a warehouse - or even a brick and mortar store - buying and storing inventory, and hiring the staff required for such functions. As with any other form of retail trade, the seller makes his profit from the difference between the wholesale and retail price of an item minus any sales, dealer or shipping costs incurred.
Alidropship; Doba Inc.; Dropshipzone; Inventory Source; Megagoods, Inc.; Modalyst, Inc.; Orderhive; Printify, Inc.; Salehoo Group Limited; and Sunrise Wholesale Merchandise LLC.
A brick and mortar store is not required for a drop shipping business model. It can be eliminated entirely or combined with drop shipping order fulfillment. A physical retailer can display potential drop shipping items, provide shipping item details through a catalog, or maintain a website with information that is only available online. A virtual retailer only has one website.
Drop shipping retailers are under no obligation to disclose the practice or, like any other retailer, the wholesale source of the products they sell. This can be achieved by "blind shipping" (shipping of goods without a return address corresponding to the seller), "private label shipping" (shipping of goods from the wholesaler with a return address adapted to the retailer) or via a fulfillment house. The final order filler may also include a custom packing slip that includes details such as the company name, logo, and retailer contact information.
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