E-commerce allows sellers to reduce or eliminate the costs and ameliorate legal liabilities associated with manufacturing, buying, warehousing, shipping and carrying charges by implementing e-drop-shipping transactions. An e-drop-shipping transaction arises when an e-commerce seller (e-seller) uses the Internet to have a manufacturer or distributor ship goods purchased from the e-seller directly to a buyer rather than having the e-seller do so. Such a transaction alters the e-seller’s contractual and intellectual property liabilities.

E-sellers use the Internet to promote products and provide an Internet storefront for use by Internet buyers. Most e-sellers do not own the products which they sell. E-customers place orders with e-sellers via the Internet, who in turn buy goods from manufactures or distributors and request the goods be shipped directly to the e-buyer, resulting in an e-drop ship. The e-seller then informs the e-buyer the purchased products have processed.