FenwickNewcastle

!!!!

! Appendix!4! Drop!shipping! From!Wikipedia,!the!free!encyclopedia!

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!either!the!manufacturer,! another!retailer,!or!a!wholesaler,!who!then!ships!the!goods!directly!to!the!customer.!As!in!retail! businesses,!the!majority!of!retailers!make!their!profit!on!the!difference!between!the!wholesale!and! retail!price,!but!some!retailers!earn!an!agreed!percentage!of!the!sales!in!commission,!paid!by!the! wholesaler!to!the!retailer.! Drop!shipments!also!occur!when,!for!example,!a!distributor!has!inadequate!inventory!to!fulfil!a! customer!order!and!requests!that!the!manufacturer!or!other!partner!ship!either!part!or!all!of!the! order!directly!to!the!customer.!Drop!shipments!also!efficiently!move!goods!from!a!supplier!who! must!send!the!product!out!for!secondary!processing!before!it!can!be!shipped!to!the!customer.!In!this! scenario!the!product!moves!from!the!supplier!to!the!supplier's!provider!of!the!secondary!process! and!then!directly!to!the!customer!(rather!than!returning!it!to!the!supplier!L!which!adds!both!extra! time!and!freight!charges!without!creating!additional!value).!

!

6!

Made with