Dropshipping is a supply chain management technique where the retailer does not keep inventory in stock. The retailer transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer.
- Set up Suppliers (necessary)
- Set up Products (necessary)
- Familiarity with Processing a Sale (necessary)
- Users will need the Inventory: Products & Families permission to enable/disable drop ship for a product.
- Users will need the Sales: Sale task - order view and Sale task - order authorisation task to add and authorise drop shipped items to an order.
Table of Contents
Enable dropshipping of a product
Before items can be dropshipped, dropshipping capability needs to be enabled for a product from the product screen. Products can only be dropshipped if suppliers have been added to the product.
Enable dropshipping of a product:
- Navigate to Inventory → Products.
- Select the product you wish to enable dropshipping for.
- In the Dropship dropdown menu on the edit product screen, select Always Dropship or Optionally Dropship. If Always Dropship is selected, you will not be able to change this status during sale orders.
- Go to the Suppliers tab. Add suppliers with + or Add more items. This is necessary for dropshipping to be enabled.
- Check the Dropship box next to a supplier name to enable dropshipping of that product. Only one supplier can be checked as the dropship supplier.
Dropship a product
Once dropshipping has been enabled and suppliers added to a product, the option to dropship will be available when processing a sale.
To dropship a product:
- Check that Always Dropship or Optionally Dropship is enabled for the product (see above).
- Create a new sale as shown in Processing a Sale.
- Authorise the sale order - DEAR will automatically generate corresponding purchase orders.
- For Always Dropship items, Authorise the sale order.
- For Optionally Dropship items, check the Dropship box before authorising the sale order.
The Pick, Pack and Ship tabs will not be available for dropshipped orders. When Sale invoices are authorised, sale transactions are exported to the accounting software, and payments are received from the accounting software.
The Drop Ship Purchase Orders are different from usual purchase orders. Blind Receipt and Input methods are disabled. No Received and Unstock tabs are available.
Dropship and COGS
For standard sales, COGS transactions are generated once the Ship tab of the order is authorised. With dropshipped orders, there is no Ship tab in DEAR.
For dropship products, COGS transactions are generated when the purchase invoice is authorised. Purchase order authorisation will not generate COGS transactions for dropship products. The purchase invoice date will be used as the COGS date.
NOTE: If the purchase invoice has not yet been authorised, the COGS will show as 0 even if the stock has been received. This can cause errors in your reports and accounts.