Configuring Drop Shipping in Odoo 19:
Vendor-Direct Fulfillment Without Touching Stock

Why Drop Shipping Is the Fastest Path to Capital-Light Fulfillment

Drop shipping eliminates the most expensive variable in e-commerce and wholesale distribution: inventory. Instead of purchasing goods, storing them in a warehouse, and shipping them yourself, the vendor ships directly to your customer. You never touch the product. Your warehouse never sees it. Your working capital stays in your bank account instead of sitting on a shelf.

The business model sounds simple, but the ERP configuration is where most implementations fail. The sale order needs to automatically generate a purchase order to the correct vendor. The delivery tracking from the vendor needs to flow back to the customer. The accounting entries must skip stock valuation entirely—because no goods ever entered your warehouse. And returns need a reverse flow that routes back to the vendor, not to your receiving dock.

Odoo 19 supports drop shipping natively through the stock_dropshipping module. This guide walks you through every step: enabling the route, configuring vendors, automating the SO-to-PO flow, tracking deliveries, handling the accounting without stock valuation, and managing returns.

Enabling and Configuring the Drop Shipping Route in Odoo 19

Drop shipping in Odoo is a route—a predefined logistics path that tells the system how to fulfill demand. Before you can use it, you need to install the module and understand how routes interact with your existing warehouse configuration.

Step 1: Install the Drop Shipping Module

# Install the drop shipping module
./odoo-bin -d your_database -i stock_dropshipping --stop-after-init

# Verify installation
./odoo-bin shell -d your_database << 'EOF'
module = env['ir.module.module'].search([
    ('name', '=', 'stock_dropshipping'),
    ('state', '=', 'installed'),
])
print(f"Installed: {{bool(module)}}")
EOF

Alternatively, navigate to Apps, search for "Drop Shipping," and click Install. The module adds a new route called Dropship to your routing options.

Step 2: Enable Drop Shipping in Inventory Settings

After installation, go to Inventory → Configuration → Settings. Under the Warehouse section, enable Drop Shipping. This makes the route available at the product level and in sale order lines.

Step 3: Understand the Route Mechanics

The Dropship route creates a specific stock rule: when demand is generated (from a sale order), instead of pulling from your warehouse stock, it creates a procurement to the vendor. The stock move goes from Vendor Location directly to Customer Location—bypassing your warehouse entirely.

# In Odoo shell: inspect the drop shipping stock rule
rule = env['stock.rule'].search([
    ('route_id.name', 'ilike', 'Dropship'),
])
for r in rule:
    print(f"Rule: {{r.name}}")
    print(f"  Action: {{r.action}}")
    print(f"  Source Location: {{r.location_src_id.complete_name}}")
    print(f"  Destination: {{r.location_dest_id.complete_name}}")
    print(f"  Picking Type: {{r.picking_type_id.name}}")

The SO-to-PO Automation: How Odoo 19 Creates Purchase Orders from Sales Orders

This is the core automation that makes drop shipping work. When a sale order is confirmed, Odoo's procurement engine evaluates the route on each SO line. For lines with the Dropship route, it creates a purchase order to the vendor instead of a warehouse pick.

The Automated Flow

Here's exactly what happens when you click Confirm on a sale order with a drop-shipped line:

1. Sale order confirmed — The SO moves to "Sales Order" state and triggers procurement.
2. Procurement evaluates routes — The system reads the route from the SO line (or product default) and finds the Dropship rule.
3. Vendor selection — Odoo looks up the product's supplier info records, selects the best vendor based on sequence and quantity, and determines the purchase price.
4. PO created (or lines added) — If an open draft PO already exists for this vendor, the line is appended. Otherwise, a new PO is created.
5. Stock move created — A stock move from Vendor Location to Customer Location is linked to both the SO and PO.
6. Delivery order generated — A "Dropship" transfer appears under Inventory → Operations, linked to both the SO and PO.

# After confirming a sale order, find the linked PO
sale_order = env['sale.order'].browse(123)

# Get all purchase orders linked to this SO
purchase_orders = env['purchase.order'].search([
    ('origin', 'ilike', sale_order.name),
])
for po in purchase_orders:
    print(f"PO: {{po.name}} | Vendor: {{po.partner_id.name}}")
    print(f"  State: {{po.state}}")
    for line in po.order_line:
        print(f"  Line: {{line.product_id.name}} x {{line.product_qty}}"
              f" @ {{line.price_unit}}")

# Find the dropship transfer
pickings = sale_order.picking_ids.filtered(
    lambda p: p.picking_type_id.code == 'dropship'
)
for pick in pickings:
    print(f"Transfer: {{pick.name}} | State: {{pick.state}}")

Automatic vs. Manual PO Confirmation

By default, the generated PO is in draft state. Your purchasing team must manually confirm it before the vendor receives the order. If you want full automation (confirm SO → auto-confirm PO), you can set the vendor's purchase order approval to automatic:

# Option 1: Use a server action on PO creation
# In your custom module:
class PurchaseOrder(models.Model):
    _inherit = 'purchase.order'

    @api.model_create_multi
    def create(self, vals_list):
        orders = super().create(vals_list)
        for order in orders:
            # Auto-confirm if all lines are drop-shipped
            is_dropship = all(
                line.sale_line_id and
                any(r.name == 'Dropship'
                    for r in line.sale_line_id.route_id)
                for line in order.order_line
            )
            if is_dropship and order.partner_id.x_auto_confirm_po:
                order.button_confirm()
        return orders

Accounting for Drop Shipping: No Stock Valuation, Clean P&L

This is where drop shipping diverges most from standard fulfillment. In a normal warehouse flow, receiving goods creates a stock valuation entry (debit stock, credit accounts payable). Shipping goods creates another (debit COGS, credit stock). With drop shipping, goods never enter your stock—so there is no stock valuation layer.

The Journal Entries

When the dropship transfer is validated in Odoo 19 with automated (Anglo-Saxon) accounting, the system creates the following entries:

The key difference: there is no stock valuation account balance for drop-shipped items. The cost goes directly to COGS (or an expense account) when the transfer is validated. This means your balance sheet never shows inventory for these items, and your P&L reflects the margin immediately.

Product Category Accounting Configuration

# Check the product category accounting config
category = env['product.category'].browse(1)

print(f"Category: {{category.name}}")
print(f"Costing Method: {{category.property_cost_method}}")
print(f"Valuation: {{category.property_valuation}}")
print(f"Stock Input Account: "
      f"{{category.property_stock_account_input_categ_id.code}}")
print(f"Stock Output Account: "
      f"{{category.property_stock_account_output_categ_id.code}}")
print(f"Stock Valuation Account: "
      f"{{category.property_stock_valuation_account_id.code}}")
print(f"Expense Account: "
      f"{{category.property_account_expense_categ_id.code}}")

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