What is Dropshipping?
- Dropshipping
- Dropshipping is a supply chain model where the retailer accepts customer orders but the supplier ships directly to the customer, so the retailer never holds inventory.
Dropshipping Business Model
In dropshipping: customer orders from you → you order from supplier with customer's address → supplier ships to customer → you collect the margin. No inventory holding cost, no warehouse needed. Margin is typically thin (5–30%) due to lower differentiation. Common in eCommerce for testing new product categories.
Dropshipping in ERPNext
ERPNext supports dropshipping via the "Drop Shipping" checkbox on Sales Orders. When enabled, the system creates a Purchase Order to the supplier with the customer's address as the delivery address. ERPNext tracks the entire chain (SO → PO → Customer Delivery) without any stock entries, since goods go direct.
Infonoxe Technologies specialises in ERPNext implementation and custom software for Indian businesses.
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