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Ensuring product fulfillment

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It’s frustrating to order a product, and receive the wrong merchandise. E-commerce businesses understand that an error during fulfillment can result in a lost client (been there, done that).

Treeline has several options here. The company could warehouse inventory and ship items using company employees. However, this choice requires Treeline to pay for a warehouse and extra staff, regardless of sales levels. If sales are declining, those costs may keep you up at night.

For many sellers, a better choice is dropshipping, in which a supplier maintains inventory and ships products when the seller receives an order. The pros and cons of dropshipping are discussed in Chapter 9.

Cost Accounting For Dummies

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