Drop shipping is a fulfilment arrangement in which a seller accepts a customer order and a supplier or other partner ships the goods directly to that customer.
How it works in retail
The seller may not physically hold the inventory. Order, stock and delivery information must pass accurately between the seller and the fulfilment partner.
A retail example
An online homeware store sells a lamp, and the manufacturer dispatches it directly to the buyer.
What to keep in mind
The arrangement does not eliminate customer-service obligations. The seller needs clear agreements on availability, delivery, damaged items and returns.
Examples are illustrative. Terminology and measurement conventions can vary by business and market.