Drop shipping (also referred to as e-commerce) is a retail fulfillment where an enterprise does not store the goods it sells in stock. Instead, when the company sells a product they buy from a third party and that third party ships it directly to the customer. Consequently, the enterprise rarely sees or handle the goods. It simply acts as an intermediary.

The largest difference between drop shipping and retail is that the drop shippers do not stock or own inventory, whereas retailers tend to store inventory. Instead, the drop shipper buys inventory as needed from a third party, most often times a wholesaler, to fulfill orders.