Nevertheless, because of its reliance on suppliers’ inventory, drop-shipping may not only limit Internet retailers’ control over the costs and resources involved in PDS, but also put into question their ability to differentiate themselves from competitors that drop-ship their inventory from the same suppliers (Giesen, 2004). This challenge is unique to this supply chain strategy and, thus, helps to make a compelling case for research on the potential for differentiated services to generate differential margins in this critical context.