What Is Drop Shipping?
Drop shipping is a logistics model that enables eCommerce operations to sell products without ever having to warehouse them or pay for them until they sell them. Here’s how it works.
You open an online furniture store and sell several brand names. But you don’t have the money to warehouse what you sell or the time to deal with shipping. So, you make arrangements with the brands to pay them as soon as you sell the goods. Shipping is done from the warehouse directly to your customer.
Many eCommerce entrepreneurs operate several ventures this way. It’s a less expensive way to operate. But because other people are doing so much of the work, the margins are lower than in a traditional retail store.
When the furniture shipment arrives at your customer’s home or office, the bill of lading (BOL) will have the return address of the warehouse, but the name above the address could be your company’s (if you set it up that way).Look Up More Freight Terms