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What is Drop Shipping?

By Jim Kendle |

Jack asked:

I don't quite understand what drop shipping is. Can somebody explain?

Jim Kendle answered:

"There are two ways to describe drop shipments. The first is basically straight shipments from your location to your customer or a client of your customer. In our business, pet food sales, our wholesale buyers, i.e. the breeders of cats & dogs, buy direct from us. They also have their puppy/kitten buyers call us direct for their order of product. In these situations, payment is made by your customer who, in turn, will invoice their client.

The second is where you can direct your supplier (in our case, the manufacturer) to ship the product directly to your customer without having to bring the product into your location. This method will reduce the costs of labor, storage and transportation. You, in turn, will invoice your customer as if the product was shipped from your location."

A general definition of what drop shipping is, can be found at More answers to your questions about drop shipping can be found in the book, Drop Shipping as a Marketing Function by Nicholas T. Scheel.

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