The main advantage of in-transit merge over dropshipping is the ability to reduce cost of inventory by

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The main advantage of in-transit merge over dropshipping is
the ability to reduce cost of inventory by centralizing inventories at the manufacturer. 

supply chains save on the fixed cost of facilities, because the need for other warehousing space in the supply chain has been eliminated.
somewhat lower transportation cost and improved customer experience.
order tracking is easy to implement because of the complete integration of information systems at both the retailer and the manufacturer.

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