By relinquishing the ownership and management of the inventory of products sold to consumers, retailers pursuing a drop-shipping strategy risk the loss of control over their warehousing and inventory costs (Giesen, 2004). Moreover, they give up their decision power regarding the inventory locations to use, limiting their ability to decrease the delivery distances, associated transit times, and costs incurred in transporting their products to customers. Such decisions are likely to be made by the firm's suppliers and/or the delivery companies with which it contracts.