Drop Ship
Drop shipping is a technique of supply chain management whereby the retailer does not hold stock in goods but sends the customer order and shipment information to either the manufacturer, another retailer, or a wholesaler, who sends the goods directly to the customer.
Drop shipping can also happen when a small store (which usually sells in small lots to the public) gets one huge order for a product.
The store can have the merchandise shipped directly to the customer from the distributor or manufacturer. Drop shipping is typical with high-cost products. No inventory is held by the store in either situation, merely serving as a go-between. In this article, we will observe how ERPNext gives a smooth drop-shipping experience.
Let's consider a company that has to do business with computer monitors. Now, the shopkeeper has taken an order from a customer, ABC Inc., for 1000 24Inch DELL monitors.
Drop Shipping In Action:
1. Item Configuration
Set up the item with the required details, having Maintain Stock inhibited, as this item will be stocked.
Then, enable "Delivered By Supplier (Drop Ship).
Assign the supplier with whom the purchase order will be posted for filling up this order.
2. Sales Cycle:
- Create Sales Order with Customer, Item, Qty, Rate, Taxes and so on.
3. Order Fulfillment:
- From the Sales Order Document itself, you can create the Purchase Order for this shipment, track delivery, and bill the customer accordingly.