Glossary
Streckengeschäft (drop shipment in wholesale)
A Streckengeschäft (drop shipment) is a sale in which the wholesaler buys and sells the goods, but the manufacturer delivers them directly to the customer or the construction site. The goods never pass through the wholesaler’s warehouse.
In short
In a drop shipment the wholesaler buys and sells the goods, but the manufacturer delivers them directly to the customer. The goods never pass through the wholesaler’s warehouse.
The wholesaler still handles the order and the invoice. The opposite is a Lagergeschäft, where the goods come from the wholesaler’s own stock.
For VAT, this is a Reihengeschäft in Germany (UStG § 3 Abs. 6a). Several businesses deliver the same item one after another, and the item goes directly from the first business to the last buyer. The transport is assigned to only one of the deliveries. The tax treatment is a question for your tax advisor.
Example
A wholesaler supplies a construction project with bulky goods: pipes, radiators, cables on drums and insulation. The manufacturer delivers them straight to the building site. They never enter the wholesaler’s warehouse, and the installer’s office is not the delivery address either.
On paper, the sale runs between the wholesaler and the customer, while the manufacturer ships the goods. The wholesaler handles the order and the invoice. Prices and delivery dates come from the manufacturer, and the wholesaler asks for them with a Werksanfrage. Such deliveries are typical in project business, where large project quantities are common. In consumer goods trade, the same process is described as delivery straight from the manufacturer, without interim storage.
What to watch for
The delivery address is the site, not the customer’s office. Check it on every order.
The delivery date and the unloading conditions depend on the manufacturer. Ask for both early.
Pass the manufacturer’s order acknowledgement on to the customer, and check it against your own order.
Returns go back to the manufacturer, not to your own warehouse.
Not to be confused with
Lagergeschäft: delivery from the wholesaler’s own stock. The goods pass through the warehouse.
Drop shipment in US e-commerce: a similar mechanism, but in online retail, not in technical wholesale.
Related terms
Objektgeschäft (project business in German wholesale)
Objektgeschäft (project business) is business tied to one specific construction project, the Objekt or Bauvorhaben. It usually starts with a tender that includes a bill of quantities, unlike the day-to-day stock and counter business.
Werksanfrage (supplier quote request to the manufacturer)
A Werksanfrage is a wholesaler’s request to a manufacturer about the items of a project: project conditions, availability, delivery times, technical questions or an equivalent product.
Order acknowledgement
An order acknowledgement (Auftragsbestätigung, AB) is the seller's confirmation of a customer's order. It states the items, quantities, prices, delivery dates and terms.