Drop shipping as a method of retail allows e-commerce businesses to sell products that they do not have in stock and therefore allows for a greater degree of choice. It also allows the business not to spend money on stock that may not sell or which may have to be reduced to sell.
Drop shipping has become mainstream in e-commerce and many larger retailers use this method. Once an order is placed online then a message is sent to the manufacturer requesting the delivery of the item, either to the e-commerce site who then sends it to the customer, or to the customer directly. The e-commerce site will normally forward payment for the item to the manufacturer at the time of order but may also have an account where items are paid for every thirty days.Back to Glossary Index