Offer Dropship or POP service---
company A: buyer in China
company B: seller in China
company C: seller in others country
(relationship between B & C: branch companies, ie. two independant companies which belong to one multinational organisation)
example:
A would like to buy cargo D from B in China, but B can't provide D at the moment for several reasons (lack of stock, or is
not allowed to have production chain in China, etc...) so B has to turn to C for help and askes C to provide the cargo. But A
doesn't want to buy cargo from C directly due to some reasons (Customs delcaration etc...) So the solution is: A places an
order to B, and B places an internal order to C, then C delivers the cargo to A; and the payment procedure is the same: A
pays B, and B pays C.
So, under this situation, this shipmenet is called drop shipment, thus the order is named as drop ship order.
Drop Shipping is used by middlemen and mail order firms who DO NOT STOCK INVENTORY of the products sold for future delivery
through mail order, catalog and INTERNET ADVERTISING. Middlemen send single unit orders for products to manufacturers, or
major stocking distributors, who in turn drop ship the merchandise direct to the customers of the middlemen. Manufacturers
providing drop shipping services can gain additional sales, shift advertising costs to middlemen, offer advertising material
and reduce inventory requirements. Middlemen who initiate drop ship orders shift the risks of stocking inventory to the
supply source, including storage, insurance, overhead, and personnel BY SPENDING NOTHING ON INVENTORY, until AFTER THE
PRODUCT IS SOLD. Having products drop shipped by manufacturers, allows middlemen to concentrate on sales and advertising
functions, rather than stocking INVENTORY THAT IS ALREADY BEING STORED BY MANUFACTURERS. All of the costs of warehousing and
the personnel needed to pick, pack and ship products are eliminated. Orders can be sent by fax or email direct to the drop
shipping supply source. Small firms can compete and advertise a tremendous number of products on Internet malls, if the
product supply source will drop ship. BUT NOT ALL MANUFACTURERS WILL DROP SHIP: most prefer to sell in quantity to full
function middlemen who stock inventory, as products are physically shifted through the channel of distribution.