Supply Chain & Inventory

Dropshipping

Dropshipping is a retail fulfilment model in which the seller does not hold the stock it sells: when a customer places an order, the seller passes it to a third-party supplier or manufacturer, who ships the goods directly to the customer. The seller never physically handles the product — it markets and sells, while the supplier holds inventory and fulfils.

The appeal is low upfront cost and risk: no inventory to buy or warehouse, easy to start and scale, and a wide catalogue without stock commitment. The trade-offs are thin margins, less control over quality, fulfilment speed and stock availability, and reliance on the supplier — problems with shipping or defects still fall on the seller's brand. Common in e-commerce and marketplaces, dropshipping contrasts with holding-and-fulfilling models and blurs into arrangements where a brand uses suppliers or 3PLs to ship directly to consumers. Understanding dropshipping is useful for grasping the range of e-commerce fulfilment models and their logistics and control implications.

Why it matters

Dropshipping lets anyone run a store without owning inventory — low risk and easy to scale — but hands control of quality, speed and stock to the supplier while the seller's brand takes the blame for problems. It is a defining low-barrier e-commerce model, and understanding its logistics trade-offs explains why fulfilment control matters even when you never touch the product.

Also known as
Drop shippingDrop-ship
Where this matters at WHIZTEC
Frequently asked
How does dropshipping work?

The seller passes customer orders to a supplier who ships directly to the customer; the seller holds no inventory.

What are the downsides of dropshipping?

Thin margins and limited control over quality, fulfilment speed and stock availability, with reliance on the supplier.

More Supply Chain & Inventory terms

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