Multichannel Merchant--Allowing vendors to ship merchandise directly to a retailer’s customer, which is called drop shipping, can be an attractive option for expanding the selection of merchandise available for purchase on a merchant's website. When used correctly, a drop-shipping strategy can reduce distribution and fulfillment costs and even improve service levels within the supply chain. However, if the rules of engagement between the retailer and vendor are not clear, drop shipping can hurt profitability and jeopardize the customer’s overall experience and loyalty.

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