In the dropship model, the store owner does not need to keep the product in stock. Whenever the customer places an order then the store owner transfers the customer orders and shipment details to suppliers or manufacturers. They will ship the product directly to the customer.
Note: Webkul offers marketplace Dropship extensions for various platforms – Magento 1, Magento 2
A purchase order (PO) is an official document issued by a buyer/company authorizing to pay the supplier for products or services to be delivered in the future. It is a legally binding contract between both parties.
Need of DropShip in Purchase Order
Inventory Management is a tedious task in the web store. DropShip basically used in e-commerce because the store owner does not want to take the load of the inventory and shipping management.
And also save the shipping cost and time by directly shipping the product from supplier/ manufacturer to customer.
The store owner just needs to tie-up with suppliers and they will ship the product directly to customers and store owners will get their commission.
DropShip also used for those products which are very fragile. And store owner cannot ship easily from one place to another place like – glass products, heavy machinery, furniture etc.
Convert Bulk Sales Order into Dropship Purchase Order
The customer can negotiate for product price with the store owner and place a bulk order.
Like – The store owner is selling the T-shirt $100 per piece. But the customer wants to 1000 pieces then the customer can negotiate the price of the per piece( $90 per piece ).
If the store owner gets a bulk sales order then the store owner can convert this sales order into a dropship purchase order for directly ship the products from the manufacturer to customer.
After getting the bulk order, the store owner can create a dropship purchase order manually or automatically. The store owner has to mention the customer shipping address in the purchase order.
So that the supplier/manufacturer can ship the product directly from supplier to customer address.
DropShip Purchase Order for Custom Products
Sometimes, customers need to customize products as their requirement. And, the store cannot hold the inventory of all variety of products.
For example – The store owner has a T-shirt but the customer wants to add text on the T-shirt.
After getting the order for the customized product, the store owner can send the shipping details along with product details to the supplier.
And the supplier will directly deliver the product to the customer’s address after customizing the product.
DropShip Purchase Order for Fragile or Heavy Products
Some products are very fragile or heavy ( glass products, heavy machinery etc.) for which the store owner cannot take the risk to ship them from after arriving in his/her warehouse.
You can also use third-party logistics (3PL) to ship the products from the supplier’s warehouse to the customer’s address.
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