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| Drop Shipping is used by middlemen and mail order firms who DO NOT STOCK INVENTORY of the products sold for future delivery through mail order, catalog and INTERNET ADVERTISING. Middlemen send single unit orders for products to manufacturers, or major stocking distributors, who in turn drop ship the merchandise direct to the customers of the middlemen. Manufacturers providing drop shipping services can gain additional sales, shift advertising costs to middlemen, offer advertising material and reduce inventory requirements. Middlemen who initiate drop ship orders shift the risks of stocking inventory to the supply source, including storage, insurance, overhead, and personnel BY SPENDING NOTHING ON INVENTORY, until AFTER THE PRODUCT IS SOLD. Having products drop shipped by manufacturers, allows middlemen to concentrate on sales and advertising functions, rather than stocking INVENTORY THAT IS ALREADY BEING STORED BY MANUFACTURERS. All of the costs of warehousing and the personnel needed to pick, pack and ship products are eliminated. Orders can be sent by fax or email direct to the drop shipping supply source. Small firms can compete and advertise a tremendous number of products on Internet malls, if the product supply source will drop ship. BUT NOT ALL MANUFACTURERS WILL DROP SHIP: most prefer to sell in quantity to full function middlemen who stock inventory, as products are physically shifted through the channel of distribution. |