How Distributors Can Streamline Dropshipping—with Microsoft Dynamics 365 Business Central

September 21, 2023 Timothy Sparks

Dropshipping is an effective way for distributors to deliver products to customers faster while also reducing inventory and fulfillment costs. Instead of managing your supply chain to keep goods in stock at your warehouse, you forward customer orders to your manufacturer and supplier partners to ship the goods directly. 

You can also set up an online portal with marked-up pricing to cover your costs and allow your customers to self-service their orders. Drop shipping is a great way for start-ups to get their businesses going, and over the long run, distributors can decrease warehouse space and workforce requirements while scaling their operations and carrying a larger inventory of products for customers to choose from. 

If your customer base covers multiple regions or foreign countries, the drop shipment method allows you to send products from the closest manufacturer or supplier warehouse. For international orders, your partners will also take care of all the shipping logistics, such as import taxes and getting orders through customs. 

Processing Drop Shipments Efficiently 

As appealing as the benefits are for dropshipping, distributors also need to consider how to handle the process efficiently. If your accounting software is not set up to drop ship, it’s a labor-intensive process to coordinate customer sales orders with supplier purchase orders and then make sure each order is fulfilled correctly and arrives on time. 

That’s where Microsoft Dynamics 365 Business Central can help—with a Drop Shipment field that you can add to your Sales Order screen. As you take orders from customers, you can identify them as drop shipments, and then Business Central speeds up the process—by automatically creating a purchase order for your supplier from the customer sales order.  

By automating the process of creating supplier purchase orders from customer sales orders, you also eliminate the errors that occur when transferring the information manually. This includes duplicate orders, orders that don’t get placed at all, and orders with incorrect information. 

Enhancements to Further Speed Up Dropshipping 

You can further enhance the dropship process with Microsoft Power Automate to create a fully-integrated system that eliminates additional manual processes. For example, you can set up purchase orders created in Business Central to automatically trigger emails to vendors with the purchase orders attached. 

Going back to the portal example, PowerApps Portals gives your organization the ability to build out live, secure web portals for your customers and vendors to assess drop shipment data. You can also allow customers to place orders and give them order traceability capabilities—without any involvement from your team. Customers can see open orders as all the drop shipment activity takes place behind the scenes.  

Your customers essentially interact directly with your suppliers—under the impression they are receiving products directly from you. And with the ability to track what’s going on at all times, you can intercede any time an issue develops.  

A One-Stop-Shop for Sales Orders and Purchase Orders 

Instead of a multi-step, manual, and error-prone process in Excel, dropshipping creates a seamless, one-stop shop for both your sales and procurement processes. With an automated process that reduces your time involvement by 50%, Business Central assures sales orders and purchase orders match, and that your customers receive the right quantities and the right products every time they place an order. To learn more about Dynamics 365 Business Central and how to streamline your drop shipment process, Western Computer is glad to help. Contact us today

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