What is Drop Shipping?
Drop shipping is a retail fulfillment method that allows the online seller/retailer to sell products without ever having to produce or store them in a warehouse. Basically, the drop shipper takes the order, pays the manufacturer and provides them with shipping information, then the manufacturer ships the item directly to the customer. Thus, the drop shipper is the middle man or the sales person. It has become a huge method of online retail over the past several years.
Amazon is actually still somewhat of a drop shipper in that they don’t produce many of the products they sell. Although profit margins are lower, it is still an attractive and popular business model because retailers do not have to worry about storing any inventory, allowing them to focus on gaining new customers.