Drop shipping means the merchandise goes straight to the person or place that will use it, rather than being delivered to you and forwarded on. For distributed teams, client gifting and multi-location programs it is often the only sensible route.
What it removes
The middle step, and everything attached to it: taking delivery, storing cartons, re-packing, buying postage and running to a post office. That work usually falls on somebody who has another job.
What it adds
Cost per recipient, and address data. Individual shipments cost more per head than one bulk delivery — that is not a hidden fee, it is what shipping five hundred parcels costs compared to shipping one pallet.
It also means somebody has to hold accurate addresses. Letting recipients enter their own is more accurate than maintaining a list, and avoids a data question nobody wants to own.
Where it goes wrong
Stale addresses, missing apartment numbers and international destinations with duties nobody budgeted for. Validating addresses at the point of order prevents most of it; the rest is a matter of expecting a small percentage of returns and having a reship process.
It works best from held stock
Drop shipping per order from a production run that has not happened yet means every recipient waits on manufacturing. From held inventory, an order placed today ships this week. That is the difference between a program and a project.
Ask about tracking and returns
Tracking should be standard. Returns and reships are the part people forget to ask about, and every individual-fulfillment program has some.
Kitting and fulfillment covers individual shipping, returns and reships, and warehousing covers the held stock that makes it quick.