The practice involves a retail fulfillment method where a business doesn’t keep the products it sells in stock. Instead, when a customer purchases an item, the business purchases the item from a third-party supplier and has it shipped directly to the customer. A prevalent example involves sourcing products from a large online marketplace and fulfilling orders through a separate e-commerce platform.
This strategy offers potential advantages such as reduced initial capital investment, a wider product selection, and minimized inventory management responsibilities. Its historical context lies within the evolution of e-commerce and the increased accessibility of global supply chains, allowing smaller businesses to compete more effectively.
