Drop-shipping is a supply chain management method in which the retailer or merchant does not keep products in stock, but instead arranges for the products to be shipped directly from the manufacturer or wholesaler to the customer. This allows the retailer to offer a wide range of products without having to physically stock and manage inventory.
In the drop-shipping model, the retailer or merchant does not see or handle the product, and is only charged a price per shipped item. This can be a convenient and cost-effective way for retailers to sell products, as it allows them to offer a wide range of products without having to invest in inventory or storage space.
However, there are also some challenges to drop-shipping, such as the need to carefully manage relationships with suppliers and the risk of delays or other issues with the supply chain. It's important for retailers to carefully consider these factors when deciding whether to use drop-shipping as part of their supply chain management strategy.
Actually, The following process is involved by Drop-Shipping
- Customer places order on retail website or store front.
- Order is forwarded to wholesaler along with payment information
- Wholesaler make the ordered product packed and ships it to the customer, with the retailer's contact details and branding on the delivery docket
- Customer receives the product ordered
- the retailer handles further enquiries or returns, if required
Drop-shipping Benefits are
- Saves time and money
- Easy to get started
- Wide Selection of Products
- Flexible Location
- Easy to scale