When you drop ship, you sell a product that is shipped directly from the vendor to the customer. You sell products that you don't actually have in stock, so they do not exist in any warehouse. However, you still have to account for the product procurement, receipt, and billing.
If you sell products by drop ship, then DDI System will set up one and only one drop ship warehouse for you at the time of initial implementation. The Drop Ship warehouse has no settings other than the Short Name=Drop Ship (optional) and the Warehouse Type=Drop Ship. See Set up warehouses. This virtual warehouse will enable you to manage the drop ship transaction without impacting any of your commitments in the selling warehouse.
Do not modify the drop ship warehouse that your DDI Customer Care consultant configured during implementation. DDI recommends consulting with DDI Customer Care before adding or modifying any warehouse settings.
The Drop Ship workflow proceeds as follows:
- When a you enter a drop ship sales order as described in Create a drop ship order, the transaction takes place in the Drop Ship warehouse.
- When the vendor bills you for the product shipped to the customer, you receive what they shipped into the Drop Ship warehouse from Purchasing > Stock Receipts.
- You can then invoice the customer: click the A/P Invoice tab and specify the billing information. Click Save.
- You will see the Invoice Customer pop-up. Click OK here to invoice the customer and move the order into billing. This step is essential, since the order has neither the signature nor the ship confirmation that normally triggers the billing workflow.
We are adding a company master flag to not only invoice the customer the freight but a set percentage above what the Vendor freight was to the customer.