Drop shipping – also known as direct dispatch or virtual inventory – allows you to exponentially expand the number of product lines you offer and gives you access to a network of inventory to meet customer demand while eliminating the overhead of storing and managing physical goods. In a drop shipping model, your suppliers carry and deliver the inventory to your end customer, not you. Drop shipping has grown in popularity with the rise of omni-channel retail and the increasing expectations of customers who now have the power to acquire what they want, when they want it, from anywhere with the click of a mouse. But the drop shipping business model brings its own risks and challenges. The goal of this eBook is to help you successfully navigate some of those challenges.

1. What is it?
$327B $14.2B
DROP SHIPPING
DIRECT DISPATCH
VIRTUAL INVENTORY
Drop Shipping: a supply chain management technique in which the
retailer does not keep goods in stock, but instead transfers customer
orders and shipment details to the manufacturer or wholesaler, who then
ships the goods directly to the customer.
Growth in drop shipping (also known as direct dispatch) has been fueled
by omni-channel retail, resulting in a virtual inventory ecosystem for many
retailers…
Speed
Product
Selection
Productivity
Agility
e-Retail Sales by 20161
drop-shipped orders from a
single e-retailer in 20111
DECONSTRUCTED
SUCCESS
Drop Shipping
GROWTH
BENEFITS
COMPLEXITY
13%
VS.
100%retailers who hold
physical inventory only
carry an average of
thirteen percent of any
manufacturer’s
product line
+18.33%
potential with
drop shipping
higher profits of manufacturer that drop ships
vs. manufacturer who does not2
Visibility
Integration Control
Branding
CHALLENGES
58%
retail respondents who have
little or no integration of
business processes
retail respondents who have
little or no integration
of technology3
56%
possibilities with drop shipping in
omni-channel retail ecosystem
3x
parcel volumes
40-90%
reduction in
order-to-dispatch
time
2% .3%
drop in customer
claims of
non-arrival
0 geographic limitations
1/3
total sales delivered
via drop shipping
110 365
growth in number
of drop shipping
suppliers
275
suppliers
7.7 million
dispatched items
62,000
active SKUs
6 million
parcels delivered
ABOUT KEWILL
Kewill, a Francisco Partners portfolio company, is a global leader in multimodal transportation management software, providing
organizations with a comprehensive end-to-end platform for managing the complexities of transportation, logistics and trade compliance.
The Kewill MOVE®
platform helps companies reduce costs, manage volatility and gain greater visibility across the logistics value chain.
Trade,Transport, Store, Comply, Manage and Integrate − the Kewill transportation management platform gives you the insight, agility and
tools you need to deliver better customer service and streamline global supply chain execution for strategic advantage.The Kewill
platform supports supply chain execution activities for over 7,500 companies in more than 100 countries.Visit us at kewill.com.
SOLUTION
trade transport store comply manage integrate
1
Source: Forrester Research 2012
2
Source: The Journal of the Operational Research Society 2010
3
Source: Aberdeen Omni-Channel Retail Survey 2012
JD Williams