In the virtual-supply-chain model, a merchant sells the products but never actually takes possession of them; rather, the supplier drop-ships merchandise directly to customers as orders are received.
A case in point is Shop.com, a Web merchant based in Monterey, CA, that sells products from about 1,300suppliers. The suppliers hold the inventory and provide electronic data feeds into Shop.com's Website.
For a virtual-inventory system to work, you need a way to electronically transmit orders from your system to your suppliers' systems. Then the supplier needs to let you — and your customers — know that the goods
have shipped.
The vendors use a variety of systems to communicate with it, including electronic data interchange (EDI) and file transfer protocol (FTP). Too big a task?