The concept of drop shipping has now picked up momentum reaching the midst of growth curve, fuelled by internet commerce.

Manufacturers and retailers are seeking new ways to enrich their business. Due to cost constraints, they prefer to do business with little or no investments. Drop shipping is a process, wherein goods can be shipped directly from the manufacturer to the consumer.

Drop shipping is a supply chain management technique where the retailer does not keep goods in stock. The customers orders are transferred to the manufacturer of wholesaler, and goods are shipped from them directly to the customer. In this process, the distributor takes care of the shipping part on behalf of the retailer. The retailer dos not order stock in bulk. Instead, the stock remains with the distributor, and when a sale is made, the merchandise is packed and sent directly to the customer with the retailers label on the box. A sample item of merchandise will be displayed on the store shelf, or pictured in the catalog, or website, while the actual product purchased will be in the warehouse of the manufacturer many miles away.

Drop Shipping: how good is it for retailers?