What Is Dropshipping?
Dropshipping is a fulfillment model where you sell products without holding inventory. When a customer places an order, your vendor ships the product directly to the customer. You never touch the goods. Odoo supports dropshipping natively through its routing system, making it straightforward to mix dropship products with regular inventory products in the same sales workflow.
How Dropshipping Works in Odoo
The flow is automatic once configured. A customer places a sales order containing a dropship product. When the order is confirmed, Odoo creates a purchase order to your vendor with the customer's shipping address as the delivery destination. The vendor ships directly to your customer. You invoice the customer at your selling price and pay the vendor at the purchase price. The margin is your profit.
Configuration Steps
Enable Dropshipping
Go to Inventory → Settings and enable the Dropshipping option under the Warehouse section. This adds the dropship route to your available routes. The route creates a procurement rule that generates purchase orders instead of delivery orders when products are sold.
Product Setup
On each dropship product, go to the Inventory tab and add the Dropship route. You can have both the regular delivery route and the dropship route on the same product — Odoo uses the dropship route when the product is out of stock or when specifically selected on the sales order. Add at least one vendor on the Purchase tab with the purchase price, minimum quantity, and lead time.
Vendor Configuration
Set up your dropship vendors with accurate lead times. The lead time tells Odoo when the customer can expect delivery. Configure the vendor's email address so purchase orders can be sent automatically. If the vendor uses a specific order format, customize the PO email template to include required information like customer shipping address and special instructions.
Order Flow Detail
| Step | Action | Document Created |
|---|---|---|
| 1 | Customer places order | Sales Order (SO) |
| 2 | SO is confirmed | Purchase Order (PO) to vendor |
| 3 | PO sent to vendor | Dropship transfer created |
| 4 | Vendor ships to customer | Validate dropship transfer |
| 5 | Invoice customer | Customer Invoice |
| 6 | Receive vendor bill | Vendor Bill |
Tracking and Visibility
When your vendor ships the order, update the dropship transfer in Odoo with the tracking number. The customer sees the tracking information on their portal. Validate the dropship transfer to mark the delivery as complete, which updates the sales order status and triggers invoicing (if configured for delivered quantities).
Mixed Catalog Strategy
Many businesses combine dropshipped and stocked products. A customer order might contain items you ship from your warehouse plus items the vendor ships directly. Odoo handles this seamlessly — it creates a regular delivery order for stocked items and a dropship purchase order for dropship items, both linked to the same sales order. The customer may receive multiple shipments, but the billing is unified.
Margin Management
Dropship margins are typically lower than stocked product margins because you cannot benefit from bulk purchasing discounts on inventory. In Odoo, set up pricelists to ensure adequate margins on dropship products. Monitor the margin per product using the Sales Analysis report filtered by dropship products. If a vendor raises prices, update the vendor pricelist and adjust your selling prices accordingly.
Common Challenges
- Quality control — You cannot inspect products before they reach the customer. Choose reliable vendors and monitor customer feedback closely.
- Shipping times — Dropship lead times are often longer than shipping from your own warehouse. Set accurate delivery expectations with customers.
- Returns — Coordinate returns between the customer and vendor. You may need to receive the return and forward it, or set up the vendor to accept returns directly.
- Stock visibility — You do not know the vendor's real-time stock levels. Establish communication channels for out-of-stock notifications.
DeployMonkey + Dropshipping
Deploy Odoo on DeployMonkey and configure dropshipping routes, vendor setup, and margin tracking with AI assistance. Start selling without inventory from day one.