You can search the web won’t find a definite definition to help define such a complex topic. Retailers are at a constant battle trying to find the most economical way to fulfill online orders for consumers in the most financially effective and efficient way for consumers, retailers and vendors combined.
I have completed extensive research to learn more about where my products really come from. I love to search from amazon who in most cases is only a third-party vendor for retailers to get their products more likely to be seen and sold. On amazon, in some cases, you can choose which retailer you wish to use to buy products from. For instance, I just recently bought a phone case for my phone on Amazon, I seen below when looking at the pictures and price that there were 4 other options with lower prices but different sellers and conditions of the phone cases. Sometimes there is more than one retailer selling that one product. Sometimes even consumers will sell their old products to earn a little more cash. This is common in college students they will sell their textbooks and buy used text books from Amazon to help with their financials.
There are two way to explain cross channel ordering fulfillments. Sometimes retailers will have distributions centers that hold their inventory and drop ships* from there or fulfills the consumer order from its store directly. Another common way that it could be defined as is inventory a retailer has coming from a vendor warehouse to its’ consumers. In simpler terms, “Anywhere the inventory could reside that could be used as fulfillment.” (http://www.spscommerce.com/blog/cross-channel-fulfillment/)
But what many retailers are trying to figure out is which method of holding inventory and shipping to consumers is more cost effective and best for the retailers and consumers. In truth, each company is different in many ways from the products they sell, what they have available and where they are willing to ship too including the cost of their products. For some using a vendor to ship products to consumers is the best options. For others using the closes retailer with the product in stock in their inventory will be the best option. It all varies. Some retailers will test out both methods and see which works best for their company. Many recommend using a vendor but some will recommend otherwise.
Trying both methods during a trial period is what we recommend for retailers. This will help get the best idea for your company in terms on what will be more cost effective for your consumers and company. There is no right or wrong method. It’s a matter of finding what yours for you and the consumers.
*Drop Ships – Moving consumer goods from a manufacture directly to a retailer without going through a distribution center as most retailers choose to do.