Dropshipping is a type of retailing where, instead of the retailer (meaning you) actually keeping the goods in stock at their own location, they instead pass the order, along with the shipment details from a customer, to a wholesaler. It is then the job of the wholesaler to dispatch the goods ordered directly to your customer for you. The great thing about this method is that not only do you not need to have a large warehouse for storing all the goods you are selling, but also you make a profit through the price you pay for it wholesale, and the price that you sell it to your customer for.
In fact, where drop shipping is concerned, you are actually acting as the middleman for the product that your customer receives and the manufacturer who produces it. This particular type of system is extremely beneficial to both small retail shops, as well as internet based stores, or those people who use mailing catalogs in order to generate sales for their companies. In fact, many customers who purchase their products in this way seem to not be too bothered that there is a delay between the time when the products are ordered and when they actually have them arrive.