This retail model involves an individual listing products on a platform, like Walmart Marketplace, without holding any inventory. When a customer places an order, the seller then purchases the item from another retailer or supplier (the “second step”) and has it shipped directly to the customer. This bypasses the need for the seller to manage warehousing, packing, or shipping processes themselves.
The significance of this approach lies in its reduced capital investment requirements. Individuals can start an online business with minimal upfront costs, as they only purchase products after a customer has already paid. Furthermore, it eliminates the risks associated with holding unsold inventory. This concept has gained traction with the expansion of e-commerce platforms and the increasing availability of drop-shipping suppliers.
