Introduction to drop-shipping

This guide assumes you are a retailer, passing orders to your suppliers for shipping. 

drop ship

If you're holding inventory and drop-shipping for another company, then read this help article.

Pre-requisites

In order to drop-ship items on sales orders, you will need to have:

  • Created suppliers / vendors
  • Selected a cost price list and assigned it to your suppliers
  • Assigned one or more suppliers to your drop-ship products

To see how, read Creating drop-ship suppliers and prices.

Creating drop-ship purchase orders

Sales which are to be drop-shipped are created in Brightpearl in the usual way (admin, sales channel download, import or API).

Manually, for a single sales order

Drop-ship purchase orders are created from a sales order, using the partial/advanced fulfilment feature. This must be activated Settings > Products/Inventory > Inventory settings.

  1. Search for and open the order
  2. Hover over the Fulfil link at the top of the order
  3. Select Partial/advanced fulfil
  4. Confirm the quantity to drop-ship
  5. Select the supplier next to each item
  6. Select "Ship to customer" in the Ship PO(s) to field
  7. Click the Create purchase orders / goods notes button.
  8. A separate PO is created for each supplier selected. The POs are listed at the bottom of the screen. Click the edit pencil next to a PO to open it and send it to your supplier.

Manually, for a product range or brand

If you always drop-ship a certain range of products, find the unfulfilled sales for those products using the filters on the Sales detail report. Select the relevant lines and update the sale status to something along the lines of "Due to drop-ship". From the Sales list, create drop-ship purchase orders using the Drop-ship button.

Where local inventory has run out

While you have inventory, it will be allocated from the warehouse selected on the channel. Once the inventory is all used up (or you never had any in the first place) you will see orders where no inventory is allocated. From the Sales list, select the orders that have no allocations and create drop-ship purchase orders using the Drop-ship button.

Using Automation

The Brightpearl Automation app can be set up to create drop-ship purchase orders automatically. See Automation actions for more detail. 

Shipping drop-ship orders

Since there is no goods out note for the drop-shipped sales order, you'll have to notify the customer that their items have shipped by other means. The items on a drop-ship purchase order are linked to the respective lines on the original sales order, so when you mark the purchase order as 'shipped', the sale is updated too.

Drop-ship purchase orders can be marked as shipped automatically when a purchase invoice is received against them, or you can choose to update them one by one, or in batches.

For more detail, read about shipping drop-ship purchase orders.

Drop-shipping and accounting

Just as with regular purchase orders, you'll need to receive a purchase invoice against a drop-ship PO. The key difference between drop-ship POs and regular POs is that you don't receive any items into stock from a drop-ship PO, so there is no impact to your inventory asset value.

Similarly, you will need to invoice the sales order to complete all accounting processes. However, since you didn't carry the stock, there is no asset value of inventory to use for cost of goods sold. There will be no accounting transactions which are normally associated with a shipped goods out note.

For more detail, see Drop-shipping and accounting.

Feeding channels with drop-ship inventory levels

You may not hold stock of drop-shipped products, yet you want to show an available quantity of these items in your sales channels if they can still be fulfilled via drop-ship.

If you have access to a feed of supplier inventory, you can create a separate 'virtual warehouse' for your supplier's inventory.

If you usually hold stock of an item, but want to continue selling (and drop-shipping) this item when stock has run out, you will need to use settings in your sales channel platform for "continue selling when out of stock".

See Drop-shipping and inventory for more detail.

 

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