Hi, I will try explaining this with a trading goods example: Normally

What do you mean by drop shipment?

Question Posted / rohan

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Answer Posted / rohan

Hi,

I will try explaining this with a trading goods example:

Normally customer places the order on the distributor and
then the distributor will place the order on the vendor or
the manufacturer. Once the material is shipped from the
vendor it reaches the distributor and then the distributor
bills the material to the customer.

Now incase the material is directly billed by the vendor or
the manufacturer to the customer then we call this
transaction as drop shipment. (NO INVOLVEMENT OF THE
DISTRIBUTOR)

Thanks

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