drop ship guide

Definition And Explanation Of Drop Shipping

There are different definitions of drop shipping with each definition being specifically related to the type drop shipping business being engaged in.

In all cases, however, drop shipping is the shipment of a product to a customer by a factory or distributor at the request of a seller.



 

And rather than developing a complex definition that has many twists and turns, we will proceed to define the process by way of example.

Prior to the advent of the internet, Mail order catalog companies were the main users of drop shipping and the business was defined by them.

A mail order catalog company focuses on sales. It does not buy inventory and does not store inventory.

It takes an order from a customer and then orders the product from the supplier. The supplier ships the product directly to the customer.

When the mail order catalog company has a product drop shipped to the customer, the supplier includes an invoice that names the mail order catalog company as the supplier and not the company that did the actual shipping.

The process hides the fact that the mail-order catalog company does not have an inventory and that it did not ship the product. The receiving customer sees the invoice from the mail-order catalog company and assumes that the mail-order catalog company did the actual shipping.

By any definition of drop shipping you can see the advantages to the mail-order catalog company.

The advantages include, but are not limited to, the following:

There is no requirement to invest in inventory, there is no requirement to have a warehouse, there is no requirement to have a staff to ship product, there are no problems of having excess inventory that can not be sold, and the seller can focus totally on the selling process.

With the advent of the Internet drop shipping is now not limited only to mail-order catalog companies. Many of the on-line stores use drop shipping. Very small entrepreneurs are able to start their businesses by offering hundreds of products that can be drop shipped and are able to put all their time and money into creating a good web site and advertising.

If you are interested in drop shipping, one of the first things that you should do is look at a good source of drop shippers and look at the various drop shipping information directories and other support material that is available.

Information about them is in the navigation bar of this page.