A drop shipping service is part of a supply chain where an online retailer does not actually have any of the items that they are selling, but they are responsible for the transfer of those goods from wholesalers to customers who place orders with them. The online storefront takes the orders, and the wholesalers that they work with actually send the product to the customers. An online dropshipping company might not seem like a profitable business venture because they don't actually produce anything, but they make money by keeping the difference between the wholesale price and retail price.
A very common procedure for a drop shipping service is to offer pictures of the products that they offer in a catalogue or on a web site, but some companies also have display stores where they keep show items for customers to come see in person. Online dropshipping has become much more common in the 21st century, since more people are shopping online than ever before. This type of online storefront has been helpful for small businesses trying to sell their product and having a hard time finding their market, for example, or who have a very specialized type of product.
A drop shipping service will often have the wholesaler do something called private label shipping, which is when they have the merchandise shipped from the wholesaler with a return address that is customized to list the name of the retailer. The online storefront may also have the wholesaler include a customized packing slip that indicates the retailer's company name, logo, and/or contact information. Since online dropshipping can get a bit confusing for the customer, these procedures highlight the retailer rather than the manufacturer.
Online dropshipping is no different from any other form of retail sales, but rather than having the manufacturers send the goods to the retailer they just do the job of selling the goods and have the manufacturer send them right to the customer.