Drop Ship and Consignment Warehouses.

[Former Member]

Hi Everyone;

What is the main difference between a Drop Ship and a Consignment Warehouse. As per my understanding example for Drop Ship warehouse would be ebay, as if some company wants to sell it s products it will use ebay as a drop ship warehouse.

Consignment warehouse only has a accounting effect when the products is sold. so example of consignment warehouse will be like Honda selling it s cars through it s dealers..so if a dealer in new york sold one Honda car only then it will have an accounting and warehouse effect in it s headquarters in Detroit and Ny.

Please correct me if i am wrong as i always get confused in this. I am preparing for my B1 certification.

Thanks and Regards

Nitin

[Former Member]

Your understanding is correct.

In addition to that, following is as per SAP Help Document

Drop Ship

Select to define the warehouse as a drop ship warehouse. Use when the company does not manage inventory, but receives commission for every order.

Drop ship warehouses cannot be used for serial or batch items.

Inventory Transfers as Customer Consignments

If you deliver items to your customer in the form of a consignment, you can use this function to enter the inventory transfer from your warehouse to the consignment stores in the system.

When items are withdrawn from the consignment stores at the customeru2019s site, you create an outgoing invoice for the appropriate quantity and specify that the items be delivered from the consignment stores.

You have to create a storage location for the consignment to enable the consignment inventory to be managed separately from the rest of your item inventory.

If you maintain consignment inventory for several customers, we advise creating a consignment store for each customer so that the inventory for each customer can be monitored more easily.

You can then display the consignment inventory using the warehouse reports.

[Former Member]

Thanks a lot..

Regards

Nitin