March 31, 2006, 12:00 AM

An orderly process

(Page 2 of 2)

Drop shipping drops out

It`s not surprising that survey respondents say they prefer using one major carrier over another given the chance to negotiate one-on-one preferred rates and volume discounts. The use of preferred carriers also underscores the fact that most web retailers taking part in the research prefer to maintain their own inventory. Drop shipping may help extend an online retailer`s total merchandising base. But most web merchants taking part in the latest Internet Retailer survey see drop shipping as a small part of their total fulfillment program. Almost two-thirds of the retailers polled—63.8%—indicate that less than 3% of their orders are filled via drop shipping arrangements, compared with more than 22.7% who say drop shipping accounts for more than 20% of their order volume and 4.5% where drop shipments are between 16% and 20% of all orders.

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