on 05-07-2008 10:28 AM
Hi friends, this is shyam can anybody please tell me what is the meaning of drop shipment
regards
shyam
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Hi,
A transfer of goods directly from a wholesaler or manufacturer to a third-party customer.
A drop shipment is based on an order from a customer to a distributor. The distributor initiates the shipment by informing the wholesaler and then bills the customer for the goods.
Drop shipping is a supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to wholesalers, who then ship the goods directly to the customer. The retailers make their profit on the difference between the wholesale and retail price.
The two main benefits of drop shipping are - no upfront inventory to purchase and a positive cash flow cycle. A positive cash flow cycle occurs because the seller is paid when the purchase is made. The seller usually pays the wholesaler using a credit card or credit terms. Therefore, there is a period of time in which the seller has the customer's money, but has not yet paid the wholesaler. Often, web retailers starting their own business will confuse drop shipping services with those offered by a fulfillment house.
REWARD POINTS IF HELPFUL
Regards
Sai
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