Consumer rights - Drop shipping

What is Drop Shipping?
Drop shipping is a supply chain management technique. Instead of keeping goods in stock, the retailer transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer.

Just as in retail businesses, the majority of retailers make their profit on the difference between the wholesale and retail price, but some retailers earn an agreed percentage of the sales in commission.

Drop shipping is not illegal and is normally nothing to be concerned about when making an online purchase. There are a couple of risks involved, and you should be aware of these.

• Back ordering

'Back ordering' may occur when a seller places a shipment request with a wholesaler and the product is sold out. It may result in a long wait for shipment while the wholesaler waits for new products. This will reflect badly on the retailer. A serious wholesaler will keep its retailers updated. In the end, however, it is the business owner's job to be aware of the quantities that the wholesaler has available.

• Import duties

Be sure to read product descriptions as well as 'terms and conditions' carefully before purchasing and confirming. This is important as it may be the responsibilty for you as a consumer to pay taxes on the prodoucts if they are shipped from abroad.


If you are unsure about any of this, please refer to: http://newzealand.govt.nz


Many thanks,

The PriceSpy Team