More about drop shippers-2

Many of these snafus were caused by slow, inefficient communication between wholesalers and e-tailers. In many cases they sent orders back and forth via fax or e-mail, or even — gasp — used the phone. Orders had to be keyed in manually and were prone to human error.

Even for those companies that sent information electronically using EDI or XML, obstacles were numerous. Businesses tend to do things their own way, all the way down to the number of digits in a purchase order number. Or how many lines they use in purchase orders, or how many words are allowed in each field of a purchase order. Consequently, drop-shipping created as many problems as it solved. The problems usually were the suppliers' fault.

For suppliers, it was a foreign concept to ship, say, one camera to a buyer's home. They were used to shipping pallets of products to retailers. Worse still, as Internet commerce rocketed, the demand for drop-shipping companies exploded, leading plenty of shady salesmen to set up drop-ship firms. Sure, they would take a store owner's money, but would they ship the product, that was the question?