Do you use drop shipments? Enabling the NetSuite Drop Shipments & Special Orders feature streamlines and simplifies these unique order situations for you. Let’s take a look at how this feature works.
NetSuite Drop Shipments Overview
First, how do drop shipments work? A drop shipment is necessary when you are shipping items directly to your customer from your vendor. Drop ship items never pass through your warehouse, so drop shipments result in lower inventory costs and faster deliveries. When you use the NetSuite Drop Shipments & Special Orders feature, NetSuite will automatically create purchase orders based on sales orders created for drop ship items.
Setting Up NetSuite Drop Shipments
Setting up drop shipments in NetSuite takes just a bit of work behind the scenes. Let’s take a look.
Enable the Feature
First, you’ll need to enable the Drop Shipments & Special Orders feature, which you can find on the Items section of the Items & Inventory tab in Enable Features.
Set Preferences
Next, set some key preferences for drop shipments. To do that, navigate to Accounting Preferences (Setup > Accounting > Preferences > Accounting Preferences) and choose the Order Management tab. On that tab, scroll down to the Drop Shipments & Special Orders section.
Here, you can set a number of different preferences. For example, you can use the Drop Ship P.O. Form dropdown to select the purchase order form NetSuite will use when creating a PO for drop shipments. You can also use the checkbox options to do things like automatically email or fax drop ship purchase orders and automatically update drop ship order quantities. The dropdown field Drop Ship Fulfillment Quantity Validation gives you the option of ensuring that linked transactions (i.e., the original drop ship sales order and the connected purchase order) have the same quantities listed for items.
Configure Items for Drop Shipment
You will also need to identify which items will be used for drop shipments, which you can do on the item record. Designating an item for drop shipment will simplify things for you, since every time a drop ship item is added to a sales order, NetSuite will automatically create a corresponding purchase order for your vendor.
There are two types of items you can designate for drop ship: inventory items and non-inventory items for resale. On an item record for one of these item types, navigate to the Purchasing/Inventory tab and select the Drop Ship Item checkbox.
Then, scroll down to the Vendors sublist. Here, you can select the vendor for this item and mark them as preferred using the Preferred checkbox in the list. When you’re finished, save the record.
Now, when this item is selected on a sales order, NetSuite will automatically create a corresponding purchase order. The purchase order will display the preferred vendor and will list the customer’s shipping address, since this item will be shipped directly to the customer.
Conclusion
Once you’ve set up your items and preferences for drop shipments, you can start selecting items for drop shipment on sales orders. The NetSuite Drop Shipments & Special Orders feature enables you to drop ship items directly from your vendors to your customers.
If this is a feature you would like to begin using in your account or if you have any other NetSuite needs, SuiteRep would love to come on board and help. Our diverse NetSuite experience enables us to provide NetSuite solutions tailored to your unique needs. Contact us to get the conversation started.