ECOMMERCE

Dropshipping Fulfillment: Understanding the Supply Chain and Fulfillment Process

Discover what is dropshipping, fulfillment, understand how the supply chain really works and the fulfilment process, step-by-step, including inventory, order management, and more.

For many small businesses, the act of capturing and fulfilling orders in their online store is tricky. To make matters worse, ecommerce fulfillment operations have become more complex, with multi-node networks, sophisticated technologies and many different transportation strategies.

In-house fulfillment and warehousing comes with an ocean of hassle:

* Poor inventory management
* Unsatisfactory order management
* Expensive labor
* Slow processing speeds

It’s no wonder why one-third of merchants are outsourcing order fulfillment and more plan to do so.

One way to solve these problems? Dropshipping fulfillment, which allows ecommerce businesses to meet order demands without managing a warehouse, plus reduce the cost and risk of inventory carry.

What is dropshipping fulfillment?

Dropshipping fulfillment refers to when a business doesn’t keep the products it sells in stock. When the business sells a product, it purchases the item from a third-party supplier and has it shipped to the customer. As a result, the seller doesn’t have to handle the product directly or manage any supply chain.

Supply chain is a fancy term describing the path a product takes from conception through manufacturing and finally into the hands of a customer. If we were talking with hard-core supplier chain gurus, they’d insist a product’s supply chain reaches all the way to the procuring of the materials (like oil and rubber) used to manufacture an item. But that’s a little intense.

For the purposes of this article, we don’t need to get quite that detailed. You simply need to understand the three most applicable players that make up the dropshipping supply chain: manufacturers, wholesalers, and retailers.