What is "drop shipping" in Oracle Order Management?

Drop shipping in Oracle Order Management refers to a fulfillment method where a third-party supplier ships products directly to the customer. This process allows businesses to sell products without maintaining inventory on their premises. When a customer places an order, the order is forwarded to the supplier, who then delivers the product straight to the customer’s address.

This approach offers several advantages, including reduced overhead for the seller, as there is no need to stock items or maintain a warehouse for inventory. It also enables sellers to broaden their product offerings without the associated costs of holding stock. In a drop shipping model, the seller typically focuses on customer service and marketing, while the supplier handles inventory and fulfillment logistics.

The other options describe different concepts that do not encompass the core principle of drop shipping. For example, the idea of products being returned at the customer's expense relates to return policies but does not explain the fulfillment process. Similarly, consolidating orders to decrease shipping costs pertains to logistics management rather than direct fulfillment from supplier to customer. Efficient inventory management strategies aim to streamline stock levels and storage but do not specifically highlight the unique characteristics of a drop shipping arrangement.