Assessing the impact of drop-shipping fulfilment operations on the upstream supply chain

Abstract

The use of drop-shipping strategies, the practice where end-consumer orders are fulfilled directly from upstream suppliers upon a retailer’s request, has grown in popularity. Due in large part to the growth of online retailing and the increased focus on integrated omni-channel fulfilment, retailers continue to express the strategic urgency of drop-shipping operations. In a broader sense, the concept of drop-shipping represents a new and emerging aspect of the supply chain triad phenomenon, where a buyer contracts with a supplier to deliver services directly to the buyer’s customer. In order to more fully understand the operational nuances and upstream impacts of triadic service supply chain relationships, we adopt a qualitative research methodology to investigate suppliers in the service triad, a perspective that has been, to-date, under-researched. By exploring these issues in the context of the drop-shipping service triad, we more specifically shed light on the processes and operational challenges that suppliers face when assuming the bridge position in drop-shipping service triads. Therefore, this research extends the current drop-shipping literature by shifting the research focus away from retailers to suppliers; and hence, shifting the focus from strategic use of drop-shipping towards a more tactical/operational perspective by exploring those who carry out drop-shipping operations.

Keywords:

• retail supply chain
• drop-shipping
• fulfilment
• distribution system
• service design

Disclosure statement

No potential conflict of interest was reported by the authors.