Drop-Shipment Delivery Law and Legal Definition

Drop-shipment delivery refers to a product delivery method. Under this method, a manufacturer makes direct shipment of goods to a consumer. Under drop-shipment delivery, a manufacturer does not deliver the goods to a consumer through a wholesaler. However, if a wholesaler has taken the order, s/he is entitled to receive part of the profit from the sale.

The following is a case law defining drop-shipment delivery:

A drop shipment delivery is defined as a shipment of goods directly from the manufacturer to a dealer or consumer rather than first to a wholesaler. [A.B.F. Freight Systems, Inc. v. Austrian Import Service, Inc., 798 S.W.2d 606 (Tex. App. Dallas 1990)].