# Drop shipment processing

*Last updated: 2026-06-22*

> Drop shipment processing is a fulfillment model in which a manufacturer or supplier ships goods directly to the end customer while a retailer or intermediary manages the commercial transaction without ever taking physical possession of the goods.

Drop shipment processing is a fulfillment model in which a manufacturer or supplier ships goods directly to the end customer while a retailer or intermediary manages the commercial transaction without ever taking physical possession of the goods. The model is widespread in e-commerce and B2B mail-order trade, as it substantially reduces warehousing costs and tied-up capital. Freight forwarders and customs brokers face a particular challenge: shipping documents, invoices, and customs declarations must accurately reflect the three-party relationship between supplier, seller, and consignee, since discrepancies between invoice values and goods values can prompt customs queries. Contractual clarity on liability for damage and returns handling is essential. Drop shipment processing differs from consignment trading, where the intermediary takes at least temporary possession of the goods.

**Source:** [https://en.wikipedia.org/wiki/Drop_shipping](https://en.wikipedia.org/wiki/Drop_shipping)

## Quick Facts

| Property | Value |
|---|---|
| Term | Drop shipment processing |
| Language | EN |
| Word count | 123 |
| Last updated | 2026-06-22 |
| Source | https://en.wikipedia.org/wiki/Drop_shipping |

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