Overview

Drop shipping is a widely used supply chain management method that allows retailers to operate without maintaining inventory. Instead, retailers transfer customer orders and shipment details to manufacturers, wholesalers, or other retailers, who then ship the goods directly to the customer. This method is particularly beneficial for businesses dealing with expensive products or those that receive large, one-time orders. In this article, we will explore how iVendNext facilitates a seamless drop-shipping experience, from item configuration to order fulfillment.

What is Drop Shipping?

Drop shipping is a retail fulfillment method where the retailer does not keep goods in stock. Instead, when a retailer sells a product, they purchase the item from a third party and have it shipped directly to the customer. This means the retailer never sees or handles the product. Drop shipping is especially useful for businesses that want to reduce inventory costs and streamline their supply chain.

Key Benefits of Drop Shipping

• No Inventory Management: Retailers do not need to maintain stock, reducing storage costs and the risk of overstocking.

• Wide Product Range: Retailers can offer a broader range of products without the need to invest in inventory.

• Scalability: Drop shipping allows businesses to scale more easily, as they do not need to worry about inventory constraints.

Configuring Items for Drop Shipping in iVendNext

To effectively use drop shipping in iVendNext, the first step is to configure the items correctly. Here’s how you can set up items for drop shipping:

1. Item Configuration

• Disable Stock Maintenance: Since drop shipping does not involve maintaining inventory, ensure that the "Maintain Stock" option is disabled for the item.

• Enable "Delivered by Supplier (Drop Ship): This option indicates that the item will be shipped directly by the supplier.

• Set the Supplier: Assign the supplier who will fulfill the order. This supplier will be used to generate the purchase order.

2. Sales Order Creation

• Create a Sales Order: Enter the customer details, item, quantity, rate, taxes, and other necessary information.

• Check Drop Shipping: Ensure that the drop shipping option is selected for the item in the sales order.

Managing Sales and Purchase Orders in Drop Shipping

Once the item is configured and the sales order is created, the next step is to manage the sales and purchase orders.

1. Generating Purchase Orders

• From Sales Order to Purchase Order: Directly from the sales order document, you can create a purchase order for the supplier. This purchase order will include the customer’s shipping details.

• Supplier Fulfillment: The supplier will then ship the product directly to the customer based on the purchase order.

2. Tracking Delivery and Invoicing

• Track Delivery: iVendNext allows you to track the delivery status of the order. This ensures that you can keep the customer informed about the shipment’s progress.

• Invoicing the Customer: Once the order is fulfilled, you can generate an invoice for the customer directly from the sales order.

Drop Shipping Between Subsidiary Companies

In some cases, businesses may have multiple subsidiary companies that handle different aspects of the supply chain. iVendNext supports drop shipping between subsidiary companies, allowing for a streamlined workflow.

Scenario: Drop Shipping Between SAS and BV

1. Client Contacts SAS: The client places an order with SAS, which handles sales orders.

2. SAS Generates a Sales Order: SAS creates a sales order and converts it into a purchase order for BV, which handles stock purchases.

3. BV Fulfills the Order: BV ships the product directly to the client.

4. Invoicing and Payments: BV invoices SAS, and SAS invoices the client. Payments are processed accordingly.

Steps to Implement Drop Shipping Between Subsidiaries

1. Create a Sales Order in SAS: Ensure the drop shipping option is checked.

2. Add BV as a Supplier: In SAS, add BV as the supplier for the item.

3. Generate Purchase Order: Create a purchase order in SAS with BV as the supplier and the client’s address as the shipping address.

4. Invoicing: SAS creates a purchase invoice for BV and a sales invoice for the client.

Conclusion

Drop shipping is a powerful method for retailers to manage their supply chain efficiently without the need to maintain inventory. iVendNext provides a comprehensive solution for managing drop shipping, from item configuration to order fulfillment and invoicing. By following the steps outlined in this article, businesses can leverage iVendNext to streamline their drop-shipping processes, reduce costs, and improve customer satisfaction.

Whether you are a small retailer or a large enterprise with multiple subsidiaries, iVendNext offers the tools you need to implement drop shipping effectively. Start configuring your items today and experience the benefits of a seamless drop-shipping workflow.