A fulfillment model where a retailer sells a product without holding inventory, and the manufacturer or distributor ships directly to the customer.
Dropshipping is a retail fulfillment model in which the seller never physically stocks the products it sells. Instead, when a customer places an order, the seller forwards it to a manufacturer, wholesaler, or 3PL, which ships the product directly to the end customer under the seller's branding.
The model minimizes upfront inventory risk and capital requirements, making it popular for new eCommerce brands testing product-market fit. However, dropshipping sellers have less control over fulfillment speed, packaging quality, and inventory accuracy than brands using a dedicated 3PL — since they depend on a supplier's own warehouse operations.
As dropshipping brands scale, many transition to a hybrid or fully-owned inventory model with a 3PL, trading some margin for faster shipping times, branded packaging, and more reliable stock levels — all of which improve customer experience and reduce return rates.
Once order volume is consistent and predictable (commonly 50-100+ orders/day), moving inventory into a 3PL usually improves shipping speed, packaging quality, and margin — since bulk-purchased inventory and negotiated 3PL rates beat per-order dropship pricing.
Yes — some 3PLs offer "virtual inventory" or consignment models that mimic dropshipping while giving the brand more control over branding, packaging, and shipping SLAs than a traditional manufacturer-direct dropship setup.
Our AI matches you with warehouses that meet your exact requirements — in 60 seconds. Free for shippers.
Find My 3PL — Free →