Drop Shipping Made Easy With Dynamics GP 2010

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Who says you need to procure inventory and stock it all in your own warehouse or 3PL?  Why incur the carrying cost?  Why pay all those warehouse workers to drive around on their forklifts?  Why invest in a complicated Warehouse Management System (WMS) to track picking routes, movements, etc.?

Why can’t it be easier?  Why… why… why?

OK, so maybe the dream of completely eliminating the need and costs of managing your own inventory isn’t completely realistic.  However, what if you are able to reduce the dependence on this need?  Here’s how Dynamics GP 2010 can help.


Drop shipping allows you to fulfill your customer orders by having your suppliers send the goods directly to your customer rather than sending them to you and then you fulfilling and shipping to your customer.  This skips a step in the procurement / fulfillment process (you, the middle man) and is a pretty efficient way to fulfill customer demand while reducing the overhead mentioned above.

Recently Ignify worked closely with a high volume e-tailer to help automate their drop ship business processes while at the same time improving sales and margin reporting.  We enhanced the integration between their proprietary eCommerce engine and Dynamics GP and improved their drop ship processes.  Here’s what we did:

  1. Customer places an order on one of the client’s web sites.  A drop ship sales order is then integrated into GP via web services and eConnect (integration tools).
  2. Customer’s procurement engine places drop ship orders to suppliers.
  3. When the supplier provides the tracking numbers for the drop shipment to the customer we create an integration to integrate these drop ship purchase orders into GP.
  4. We create a link between the drop ship PO and the drop ship sales order.   
  5. We integrate a drop ship PO Invoice with the true vendor cost against the drop ship PO.
  6. We set up a nightly process to automatically post the drop ship PO’s. 
  7. The sales orders are then automatically updated with the true vendor cost and they automatically are fulfilled, billed and the invoices posted.

There are more steps but I’ll stop here to make a couple of points.  One of the keys here is that we were able to automate this process so that very little manual effort was required.  Another key is that the sales order was updated with the true vendor cost, therefore enhancing our ability for effective sales margin reporting.  Add in a dose of SQL Server Reporting Services (SSRS) to provide METRICS reporting (sales, margin, net profit, etc.) and we have ourselves an effective drop ship engine.

By Tod Heath, Dynamics ERP Team Lead, Ignify –  California Microsoft Dynamics ERP Partner

Contact Ignify at gpblog@ignify.com – an Inner Circle 2009 Microsoft Dynamics Partner – offering Microsoft Dynamics ERP and Microsoft CRM customers low-cost high value services.  Ignify has offices in Los Angeles, Silicon Valley, Nashville, Chicago, and Seattle.

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