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The difference between e-commerce fulfillment and drop shipping

by Guest Author July 7, 2017

This fun guest posts comes to you from our friends at Red Stag Fulfillment

Drop shipping gets a lot of hype these days. But what exactly is it, and how is that different from traditional e-commerce fulfillment?

The biggest difference between drop-shipping and fulfillment is an eCommerce business doesn’t purchase or handle inventory before the sale. Your supplier holds onto inventory until the moment you make a sale. This is a huge advantage for startups or other cash-strapped businesses that don’t have a lot of cash flow, because they don’t have to tie up loose change on extra inventory.

On the flip side, fulfillment means owning the inventory and storing it in your garage, through an Amazon warehouse, or fulfillment center such as Red Stag Fulfillment. Since you purchase a bulk amount of inventory up front, the initial cost is higher but your margins are better and you have more control over how much you have in stock. Here’s a quick video explaining two of the most common online businesses work.

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