RETAIL MODELS & SUPPLIER FULFILLMENT
Dropshipping
Dropshipping is a selling and fulfillment model in which a retailer routes customer orders to a supplier or partner that ships directly to the customer. The retailer typically avoids holding the stock for those orders itself.
DROPSHIPPING IN PRACTICE
- Set the arrangementAgree assortment, selling and service terms.
- Connect order dataExchange availability and accepted orders.
- Manage the outcomeTrack delivery, exceptions and total economics.
Use the agreed units, actual records and approved procedures for your operation.
A WORKED EXAMPLE
A sale needs more than a margin calculation.
A store lists an item supplied through dropshipping. The supplier sells its remaining stock elsewhere before the next availability update. The retailer must resolve the accepted order and customer promise. Not owning the stock did not prevent a stockout exception.
WHAT THIS MEANS FOR YOUR QUOTE
Agree the requirement before comparing quotes
Use the actual shipment, stock and service requirements. Record the billing unit, included work and responsibility for exceptions.
A LITTLE MORE CONTEXT
Questions about Dropshipping
Does dropshipping remove all upfront costs?
No. Selling, integration, support and other costs remain.
Is supplier availability important?
Yes. It determines whether accepted orders can be fulfilled.
Is markup the same as profit?
No. Include the complete costs and obligations.
Source & example notes
Definition and operational example prepared by 3PL Hub. Examples describe hypothetical requirements; verify the actual records and agreed procedures for your operation.
Quantities, costs and scenarios are illustrative, not operating targets, approved handling instructions or guarantees. Source guidance reviewed 22 October 2026.
Last updated: · 3PL Hub
