What is drop shipping?

In a drop-ship arrangement, you sell the item and your supplier ships it; the box goes from their warehouse to your customer without touching your shelf. The appeal is obvious: no purchase ahead of demand, no warehouse, no capital sunk in stock. Ecommerce stores use it to offer long-tail catalog items, and distributors use it for oversized goods that are expensive to rehandle. What you give up is control. Your customer experience now runs at the supplier's stock accuracy, their pick speed, and their carrier choice, under your brand. The operational core of doing it well is inventory visibility you don't own: a feed of supplier stock levels current enough that you stop selling an item when their count hits zero. A stale feed means selling stock that doesn't exist, and the customer's first contact with you is a delay email. Where teams trip: treating drop-shipped SKUs as outside the inventory system because "we don't stock them." They still need records: which orders went to which supplier, confirmation and tracking per shipment, and a reconciliation of supplier invoices against what was actually shipped. Many operations run hybrid, stocking fast movers themselves for speed and margin while drop-shipping the long tail, which makes per-SKU sourcing rules part of the inventory record too.