Drop-shipping and inventory

There are three scenarios:

Scenario 1 - You do not stock the products at all, and always drop-ship

a) Supplier sends you an inventory feed

In this case your supplier may send you their daily inventory availability, via CSV, XML or FTP. You want to update all your sales channels (eBay, website, etc) with this availability. You can import the product quantities into Brightpearl to update your inventory levels which will automatically update across your sales channels. However, altering inventory quantities in Brightpearl would normally create accounting entries to update your inventory asset value.

Since you do not actually own the inventory you must ensure your products are set up with a zero cost value, so even though these accounting journals are created they have zero figures and no effect on your balance sheet.

If you want to allocate inventory from the virtual warehouse (to ensure you don't sell more than is on your supplier feed), in your sales channel settings, choose the virtual warehouse for your availability warehouse and allocation warehouse.

b) Supplier does not have inventory feeds, or inventory is unlimited

Create a virtual warehouse as above, and set it to provide inventory availability to your channels. This time set your allocation warehouse for your channels to be something other than the virtual warehouse - so that the figures in the virtual warehouse are never reduced.

Scenario 2 - You hold inventory and drop-ship the same items, with a supplier feed

In this case you will have stocked items with an asset value. When you purchase them you will use the supplier cost price and this is what will be entered into the accounting when the items are received, updating your asset value. These items will increase your inventory levels and update across all your sales channels (eBay, website, etc).

It may be that your supplier also sends you an inventory feed every morning by CSV, XML or FTP. So the real availability of your products is actually a combination of your on hand items and the items your supplier has available. In this scenario you will need to create two separate warehouses to manage your product availability. You will need a warehouse into which you receive your stocked products, where they have a cost value, and you will need a warehouse for your supplier's product availability which has a zero cost value since you don't own it. When you receive the inventory feed from your supplier each day, you will need to import the quantities to your "supplier warehouse" with a zero cost value. This is because each time inventory adjustments are made in Brightpearl, accounting entries are made to increase or decrease your asset value accordingly. By using zero cost values, even though the accounting journals are created they have zero figures and no effect on your balance sheet. 

The true availability of your products is then a combination of what you have in your own inventory and your supplier's availability. You can push the combined on hand quantity to your sales channels by selecting both warehouses on the sales channel at Settings > Channels > List channels. You will also need to specify from which warehouse inventory is used for automatically allocating your orders.

Scenario 3 - You usually hold stock but sometimes drop-ship. No supplier feed

If you don't have a feed of inventory from your supplier but you want to continue selling when you have run out of stock, you will need to use settings in your sales channel platform to "continue selling when out of stock".

The orders will download into Brightpearl as unallocated and you can fulfil to a drop-ship PO as normal.

Alternatively, you can still create a virtual warehouse with minimum quantities (similar to scenario 1), include this warehouse in your channel availability, but make sure you only allocate inventory from a real warehouse.

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