Dropshipping is the process of fulfillment of orders where stores send their sales order to a third party for the actual packing and shipping of the product. Stores are then left to just do the job of finding customers and getting orders, and then passing these on to a supplier, who in turn will just send the product to the dropshipper.

Brand identity can be lost in this process, but through carrying out dropshipping with custom packaging, it can lead to the identity being maintained and the product reaching the customer in special packaging with the right branding.

Custom packaging can be arranged by the original company manufacturing the product and also sent directly to dropshippers whenever they require it. This way the customer is rarely aware of the product having come to him or her, from sources other than the company whose product they have ordered. Companies are thus able to avoid warehouses, inventories and other inconveniences that lead to higher costs.