What e-commerce fulfillment method ships directly from supplier to customer?

Drop shipping is the e-commerce fulfillment method in which a supplier ships an order directly to the customer.

Under this arrangement, the retailer markets the product and accepts payment, but does not keep the item in its own inventory. After a customer orders, the retailer forwards the order and shipping details to a manufacturer, wholesaler or fulfillment partner. That supplier then packs and sends the product to the buyer.

The model became especially attractive with online storefronts because a seller can offer products without purchasing large quantities in advance or operating a warehouse. It reduces inventory and storage costs, but the retailer gives up some control over packaging, delivery speed, product quality and stock accuracy.

Drop shipping is not the same as just-in-time inventory. Just-in-time is a broader production and replenishment strategy, while drop shipping describes who fulfills an e-commerce order. Fulfillment by Amazon is also different: Amazon generally stores and ships inventory, whereas a drop shipper relies on the supplier to dispatch it.