Dropshipping
Definition
Dropshipping is a sales model where a company sells products without keeping them in stock itself: the order goes straight to the manufacturer or wholesaler, who ships the product directly to the end customer.
Selling without stock
The selling party shows the product and processes the order, but the manufacturer or wholesaler ships directly to the customer. That reduces the risk of unsold inventory.
What this requires from the connection
Dropshipping only works well when the supplier's stock and shipping status flow automatically to the selling party, otherwise wrong delivery promises creep in.
Practical example
A distributor shows products from several manufacturers in its web shop. When an order comes in, the system automatically routes it to the right manufacturer, who ships directly.
Related terms
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