Nothing wrong with having your suppliers blind drop ship directly to your customers. No need to tie up capital in inventory turns, and no inventory to manage is a good thing for a company.
I worked for an OEM supplier of electronic surveillance systems. We sold only to distributors and retailers. But many of our clients had us blind drop ship orders directly to their customers for exactly that reason, they didn't want to carry or mange the inventory themselves.
The reseller's websites would say things like "over 20,000 items in stock" and "most orders ship same day", yet in reality they didn't have a warehouse let alone any inventory. But to their customers they appeared to have.
As an account manager of OEM drop ship clients I got my tit in the wringer several times when we had problems sourcing components at the manufacturer’s level (DSP's, image sensors, HDDs, etc) needed to build the products we offered. Say a client would order 20,000 pieces of something we were out of but couldn't build because of some sort of BS at Ti, Nextchip, Sony, WD, etc.. things completely out of our control. For example, a couple of manufacturing plants in Singapore make the spindle motors used in 95% of the world's hard disk drives. When one of those plants got flooded and shut down for months because of a typhoon several years ago, it became about impossible for us to source hard drives and our cost more than doubled in price almost overnight because of the shortage. Yet, to my clients the Singapore typhoon was my fault. I drank a lot of Jack Daniels back then.
AI
