Dropshipping is a popular method of order fulfillment that allows retailers to sell products without ever keeping those physical products in stock. Instead, the retailer purchases products from a manufacturer or wholesaler and has them ship the orders directly to their consumers. Dropshippers act as the middlemen between suppliers and consumers.
Imagine you are a company who sells t-shirts. A customer purchases a t-shirt from you, and then you buy that t-shirt from your supplier. You tell the supplier to bill the cost of the t-shirt to you, but you set the delivery address as your customer's.
Dropshipping has benefits because it means that retailers don’t bear the expense of storing products and they only order what they truly need. But, it can also be complex because dropshippers must be capable of balancing multiple addresses and invoices so that orders don't get mixed up or billed incorrectly.