Purchasing inventory as needed is called just in time fulfillment, the idea is to keep inventory on-hand to a minimum. Dropshipping usually means the product i

Purchasing inventory as needed is called just in time fulfillment, the idea is to keep inventory on-hand to a minimum. Dropshipping usually means the product is fulfilled (packed and shipped) from the manufacturer directly to the buyer. So dropshipping is also just in time because there’s no inventory maintained by the seller, but with the additional feature that the manufacturer does the fulfillment as well. If you buy a case of widgets from a factory overseas and sell those on Shopify or eBay, ordering more when you run low, that’s just in time. If you take the orders and payments and then direct the overseas factory to ship directly to your customer, that’s dropshipping. If you let a third party such as Amazon maintain inventory and do fulfillment for you, that’s outsourcing logistics. Dropshipping does have a bad name, I think because so many amateurs got into it hoping for a quick buck (thanks, Tim Ferriss!) and hordes of wannabe digital nomads thought they could get rich or at least support themselves dropshipping low-quality products. I have met plenty of those people and none of them were making money doing it. Big companies and reputable retailers dropship all the time but they have the support infrastructure in place to handle the problems that come up, and the scale to buy in quantity. Dropshipping is not necessarily just B2C (business to consumer). It’s much more common in B2B. For example Foot Locker orders 20,000 pairs of shoes from Nike. Those get manufactured in Vietnam, put into a container, picked up at a port, and trucked directly to Foot Locker’s distribution center. Nike never held the shoes in their inventory. That’s bread and butter in B2B logistics. Scaling that down to B2C with individual orders means losing the advantages of bulk purchasing and shipping.