Operations•3 min read
Dropshipping
Definition
Fulfillment model where retailer sells products shipped directly from supplier to customer.
Detailed Explanation
Dropshipping is an order fulfillment method where a retailer does not keep products in stock. Instead, when a customer places an order, the retailer purchases the item from a third-party supplier who ships it directly to the customer. This model requires minimal upfront investment but typically has lower margins.
Key Points to Remember
- 1No inventory holding required
- 2Lower startup costs
- 3Supplier handles fulfillment
- 4Lower profit margins
- 5Less control over shipping and quality