Executive Briefings

Drop Shipping vs. Order Fulfillment: Take Your Pick

Determining the best way to store and ship products is a crucial part of your business. There are a number of options for doing so, and two of these are becoming increasingly popular: drop shipping and third-party order fulfillment.

These two options are similar yet different. Drop shipping is the process whereby a merchant's e-commerce or mail orders are handled and shipped directly by the manufacturer or distributor to the end customer. Order fulfillment is the process whereby e-commerce or mail orders are handled and shipped by the merchant or a third-party fulfillment provider.

In the case of drop shipping, manufacturers or distributors ship products directly to consumers. For merchants, this means little to no inventory costs. It also means less risk, as merchants aren't sitting on a pile of inventory. A downside, however, is that it comes with less control. By not managing your inventory, you have less knowledge of what's available, and you will ultimately be held responsible for any errors made by your suppliers that may lead to back orders.

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Keywords: Global Fulfillment and Distribution, Third-Party Logistics, Logistics, Order Fulfillment & P.O. Mgmt., Technology, Business Strategy Alignment, Supply Chain Analysis & Consulting, Global Supply Chain Management, E-Commerce, Direct To Consumer Shipping

These two options are similar yet different. Drop shipping is the process whereby a merchant's e-commerce or mail orders are handled and shipped directly by the manufacturer or distributor to the end customer. Order fulfillment is the process whereby e-commerce or mail orders are handled and shipped by the merchant or a third-party fulfillment provider.

In the case of drop shipping, manufacturers or distributors ship products directly to consumers. For merchants, this means little to no inventory costs. It also means less risk, as merchants aren't sitting on a pile of inventory. A downside, however, is that it comes with less control. By not managing your inventory, you have less knowledge of what's available, and you will ultimately be held responsible for any errors made by your suppliers that may lead to back orders.

Read Full Article


Keywords: Global Fulfillment and Distribution, Third-Party Logistics, Logistics, Order Fulfillment & P.O. Mgmt., Technology, Business Strategy Alignment, Supply Chain Analysis & Consulting, Global Supply Chain Management, E-Commerce, Direct To Consumer Shipping