Drop-ship Warehouse in SAP Business One

Today I will let you know about Drop-ship Warehouse in SAP Business One.

Drop shipping is an order fulfillment method where store does not keep the products in stock. Instead, when a store sells a product using the drop-shipping model, it purchases the item from a third-party and then third-party shipped directly to the customer. As a result, the seller doesn’t have to handle the product directly.

I will show you in below diagram. This process is being done in one of my client.

Now how we can configure it in SAP Business One, here I will show you below:

1. Set-up Drop-Ship Warehouse

First you create a Warehouse of Drop-ship and check on the Drop-Ship checkbox. The drop-ship warehouse to be created as a Virtual Warehouse which means without holding any inventory in the warehouse.

If you wish to manage batch and serial items with the warehouse then select the Manage Serial Numbers and Batches checkbox.

Path: AdministrationàSetupàInventoryàWarehouse

2. Creating Sales Order and Purchase Order for Drop-Shipping

           Select a drop-ship warehouse while creating Sales Order.

               On Logistic Tab by-default checked the “Proc. Doc. For Drop-ship Whse Lines” when you select a drop-ship warehouse.

                Add Sales Order document. Once you added sales order document, SAP B1 system immediately open a Procurement Confirmation Wizard window for ordering the product from one of vendor.

   Automatically Purchase Order created when finished the Procurement Confirmation Wizard.

 3. Creating A/P Invoice and A/R invoice for Drop-Shipping

     Based on Purchase Order, A/P invoice is created. In-stock shows zero as inventory is not holding in this warehouse.

     Based on Sales Order, A/R invoice is created.

This is the process to be creating Drop-Ship Warehouse in SAP Business System. Thankyou.