Drop Shipment Business Process
Receiving orders for items that you do not stock, and have a supplier provide the items directly to your customer is called Drop Shipment. The following diagram illustrates the drop shipment process.
Imagine a scenario where you order a Dell Laptop from Flipkart/Amazon(Order Processing Company). Flipkart doesn’t manufacture the Dell Laptop rather they create an order with DELL to ship the product to customer directly. DELL ships you the laptop and you pay Flipkart on successful delivery. Flipkart pays DELL after successful receipt by the customer on his behalf.
Imagine a scenario where you order a Dell Laptop from Flipkart/Amazon(Order Processing Company). Flipkart doesn’t manufacture the Dell Laptop rather they create an order with DELL to ship the product to customer directly. DELL ships you the laptop and you pay Flipkart on successful delivery. Flipkart pays DELL after successful receipt by the customer on his behalf.