Legal Definitions - drop-shipment delivery

Drop-shipment delivery refers to a retail fulfillment method where a business sells products to customers without keeping the items in its own inventory. Instead, when a customer places an order, the seller purchases the item from a third party (often the manufacturer or a wholesaler) and has it shipped directly to the customer. The seller acts as the intermediary, managing the sale and customer service, while the supplier handles the storage and shipping of the product.

Here are some examples to illustrate this concept:

• Online Boutique: Imagine an online boutique specializing in unique, handcrafted home decor. A customer orders a custom-made ceramic vase from the boutique's website. The boutique itself doesn't physically stock these vases. Instead, it sends the order details and shipping information to the artisan who creates the vases. The artisan then packages and mails the finished vase directly to the customer's home.

  This is a drop-shipment because the online boutique facilitated the sale, but the vase went straight from the artisan (the manufacturer/supplier) to the customer, bypassing the boutique's physical inventory.

• Large E-commerce Platform: A customer purchases a specific model of specialized hiking boots from a major online outdoor gear retailer. The retailer, despite its size, does not hold this particular model of boots in its own distribution centers. Instead, it forwards the order to the hiking boot manufacturer, who then ships the boots directly to the customer's address.

  Here, the online retailer is the seller, but the manufacturer performs the direct delivery to the end consumer, illustrating the core principle of drop-shipment delivery.

• Specialty Office Supply Company: A small office supply company receives an order from a corporate client for 50 specialized ergonomic office chairs. The office supply company doesn't typically stock such a large quantity or specialized items. It places the order with the chair manufacturer, who then ships all 50 chairs directly from their factory to the corporate client's office.

  This demonstrates drop-shipment because the office supply company sold the items, but the manufacturer handled the direct delivery of the products to the end-user (the corporate client), bypassing the office supply company's warehouse.