Drop ship

A drop shipper is one who engages in the practice of drop shipping. Drop shipping is a method used in supply chain management in which actual stock is not kept.

Under this system, the seller may either have sample items on display in his store, just to give the buyer an idea of what to expect from the product. In other cases, a website may supply pictures and descriptions, or an actual catalogue may be shown to the buyer to help him make purchasing decisions.

Once the buyer has placed his order, the retailer sends the order information to a wholesaler, or even to the producer himself. The item is then shipped to the buyer directly. However, even though the retailer does not make the delivery himself, the items are sold at retail prices, which in turn ensures that the retailer is able to generate profit.

Under such a setup, buyers may feel overcharged or tricked if they find out that the orders do not come from retailer stock but directly from the manufacturer or wholesaler. As such, those who engage in such a method take steps to conceal this information from customers. One way of doing this is by sending the goods without indicating any return address or source details. This is called blind shipping. In other cases, the return address indicated could be that of the retailer. This is called private label shipping.

Drop shipping may be used by small businesses who happen to receive particularly large orders for a certain product. In such a situation, it may be more efficient to simply request the wholesaler to send the items directly to the buyer. It is also particularly common in online auction sites for items which are listed as brand new.