The collaborative fulfillment of consumer orders by Internet retailers and wholesalers has proven important in the realization of sustainable levels of online profitability. Concentrating on consumer direct fulfillment (or drop shipping), an empirical simulation model evaluates avenues for improving logistical performance. The empirical simulation model centers on the online music CD retailing industry. It evaluates the effects of emergency transshipments and demand dispersion on inventory and product-release performance, as well as on transportation costs, in consumer direct fulfillment operations. Results show that emergency transshipments improve inventory and product-release performances in these operations. Furthermore, the inventory-performance improvements are maximized when inventory facilities fulfill demand that is uniformly balanced across markets primarily assigned to each facility. Finally, gains in inventory and release performance obtained from emergency transshipments outweigh additional transportation costs incurred from a greater reliance on emergency transshipments for consumer direct fulfillment. [PUBLICATION ABSTRACT]

Music Week reveals that "the number of independent music shops and chains fell sharply in 2004." Ironically, within the same year there was a 63% increase in the number of supermarkets selling music. The closing of independent and chain music stores has encouraged non-music retailers, to experiment with the selling CD's in the UK and US. In the states Walmart accounts for about one-fifth of CD's sold across the nation.

Although the record companies have suffered great economic loss as a result of widespread downloading, they have been able to survive the drastic changes that the industry is undergoing right now.  However the same cannot be said of the traditional music retailer, the majority of which have had to declare banckruptcy or have had to close a number of branch locations.  The article estimates percentages of sales that will account for the future shift from physical to digital distribution in the next several years.