{"id":4661,"date":"2025-02-14T20:28:07","date_gmt":"2025-02-14T20:28:07","guid":{"rendered":"https:\/\/gtracademy.org\/?p=4661"},"modified":"2025-05-15T12:13:04","modified_gmt":"2025-05-15T12:13:04","slug":"differences-between-dropshipping-and-third-party-business-process-in-sap","status":"publish","type":"post","link":"https:\/\/gtracademy.org\/staging\/differences-between-dropshipping-and-third-party-business-process-in-sap\/","title":{"rendered":"How SAP Supports Dropshipping & Third-Party Sales”"},"content":{"rendered":"

Dropshipping and third-party business processes are\u00a0<\/span>widely<\/span>\u00a0<\/span>applied<\/span>\u00a0<\/span>in<\/span>\u00a0<\/span>SAP and supply chain management\u00a0<\/span>to\u00a0<\/span>fulfill<\/span>\u00a0<\/span>products<\/span>\u00a0<\/span>and\u00a0<\/span>make\u00a0<\/span>customer deliveries\u00a0<\/span>while<\/span>\u00a0<\/span>not<\/span>\u00a0<\/span>stocking\u00a0<\/span>inventory.\u00a0<\/span>Though<\/span>\u00a0both\u00a0<\/span>rely<\/span>\u00a0<\/span>on\u00a0<\/span>third-party suppliers and\u00a0<\/span>limit<\/span>\u00a0inventory handling by the retailer, they\u00a0<\/span>function<\/span>\u00a0differently\u00a0<\/span>in<\/span>\u00a0SAP and\u00a0<\/span>involve<\/span>\u00a0<\/span>different<\/span>\u00a0configurations and item\u00a0<\/span>types<\/span>. This blog\u00a0<\/span>describes<\/span>\u00a0the\u00a0<\/span>main<\/span>\u00a0differences between dropshipping and third-party processes in SAP<\/span>\u00a0and how\u00a0<\/span>companies<\/span>\u00a0can\u00a0<\/span>utilize<\/span>\u00a0each for\u00a0<\/span>streamlined<\/span>\u00a0operations.
\n<\/span><\/p>\n

What is Drop shipping in SAP?<\/h2>\n

Dropshipping is a\u00a0method of\u00a0<\/span>retail fulfillment\u00a0<\/span>whereby<\/span>\u00a0<\/span>the seller\u00a0<\/span>never<\/span>\u00a0<\/span>holds<\/span>\u00a0<\/span>goods in stock. Instead, when\u00a0<\/span>an<\/span>\u00a0<\/span>order<\/span>\u00a0<\/span>is<\/span>\u00a0<\/span>received<\/span>\u00a0<\/span>by a customer<\/span>, the retailer (<\/span>seller)\u00a0<\/span>simply<\/span>\u00a0<\/span>passes\u00a0<\/span>the order to a third-party vendor (supplier),\u00a0<\/span>and<\/span>\u00a0<\/span>the<\/span>\u00a0<\/span>supplier<\/span>\u00a0<\/span>ships\u00a0<\/span>the product directly to the customer.<\/span><\/p>\n

\u2705 Key Features of Dropshipping in SAP:<\/h2>\n

There is\u00a0<\/span>no\u00a0<\/span>handling of\u00a0<\/span>inventory\u00a0<\/span>by the retailer.<\/span><\/p>\n

The supplier\u00a0directly\u00a0<\/span>ships the product\u00a0<\/span>to the customer.<\/span><\/p>\n

Utilized<\/span>\u00a0when\u00a0<\/span>businesses<\/span>\u00a0<\/span>are<\/span>\u00a0<\/span>looking\u00a0<\/span>to\u00a0<\/span>keep<\/span>\u00a0warehousing\u00a0<\/span>expenses to a bare minimum<\/span>.<\/span><\/p>\n

Within<\/span>\u00a0SAP, the item category\u00a0<\/span>employed<\/span>\u00a0is TAS (Third Party Sales).<\/span><\/p>\n

????<\/span>\u00a0SAP Process Flow for Dropshipping:
\nCustomer\u00a0<\/span>orders<\/span>.<\/span><\/p>\n

Sales Order is\u00a0made<\/span>\u00a0in SAP\u00a0<\/span>via<\/span>\u00a0item category TAS.<\/span><\/p>\n

SAP automatically\u00a0creates<\/span>\u00a0a purchase requisition.<\/span><\/p>\n

Vendor\u00a0<\/span>gets<\/span>\u00a0the purchase order and\u00a0<\/span>delivers<\/span>\u00a0the product to the customer.<\/span><\/p>\n

Goods receipt is not\u00a0captured<\/span>\u00a0in SAP.<\/span><\/p>\n

Invoice is posted and billing is\u00a0executed<\/span>\u00a0<\/span>according<\/span>\u00a0<\/span>to<\/span>\u00a0standard SD process.<\/span><\/p>\n

\u00a0What is Third-Party Business Process in SAP?<\/span><\/h2>\n


\nThe third-party business process in SAP can\u00a0<\/span>be<\/span>\u00a0<\/span>applicable<\/span>\u00a0<\/span>to various\u00a0<\/span>scenarios.\u00a0<\/span>Similar<\/span>\u00a0<\/span>to\u00a0<\/span>dropshipping, it\u00a0<\/span>involves<\/span>\u00a0a third-party supplier.\u00a0<\/span>In\u00a0<\/span>certain<\/span>\u00a0<\/span>situations<\/span>,\u00a0<\/span>though,\u00a0<\/span>the goods are\u00a0<\/span>delivered<\/span>\u00a0<\/span>first\u00a0<\/span>to the retailer\u00a0<\/span>(who then\u00a0<\/span>delivers<\/span>\u00a0to the customer), making the process\u00a0<\/span>flexible and\u00a0<\/span>adaptable<\/span>\u00a0<\/span>to<\/span>\u00a0<\/span>various<\/span>\u00a0business\u00a0<\/span>requirements<\/span>.<\/span><\/p>\n

\u2705 Key Features of Third-Party Process in SAP:
\nTwo delivery options:<\/p>\n

Direct delivery to customer (similar to dropshipping).<\/p>\n

Delivery to retailer\u00a0<\/span>and<\/span>\u00a0then\u00a0<\/span>to\u00a0<\/span>customer.<\/span><\/p>\n

Inventory<\/span>\u00a0<\/span>handled<\/span>\u00a0<\/span>by<\/span>\u00a0<\/span>retailer<\/span>\u00a0in\u00a0<\/span>some<\/span>\u00a0<\/span>situations<\/span>.<\/span><\/p>\n

SAP\u00a0employs<\/span>\u00a0TAS or TAB item categories\u00a0<\/span>based<\/span>\u00a0on the flow.<\/span><\/p>\n

????<\/span>\u00a0SAP Item Categories:
\nTAS (Third Party Sales) \u2013 for direct customer delivery.<\/span><\/p>\n

TAB (Third Party Purchase) \u2013 for\u00a0delivery to\u00a0<\/span>retailer<\/span>.<\/span><\/p>\n

????<\/span>\u00a0Key Differences Between Dropshipping and Third-Party Process in SAP
\nFeature Dropshipping in SAP Third-Party Process in SAP
\nInventory Handling Not\u00a0<\/span>managed<\/span>\u00a0by retailer May or may not be\u00a0<\/span>managed<\/span>
\nDelivery Flow
\nSupplier \u2192 Customer
\nSupplier \u2192 Customer or Supplier \u2192 Retailer \u2192 Customer
\nSAP Item Category
\nTAS
\nTAS or TAB
\nStock Entry in SAP
\nNo stock movement recorded
\nMay involve stock posting
\n<\/span>Use Case
\nDirect online retail
\nCustom scenarios,\u00a0<\/span>different<\/span>\u00a0delivery routes
\nFlexibility
\nLess flexible
\nMore configurable<\/span><\/p>\n

\u2699\ufe0f How SAP\u00a0Assists<\/span>\u00a0<\/span>with<\/span>\u00a0These Processes Efficiently
\n<\/span>The<\/span>\u00a0Sales and Distribution (SD) and Materials Management (MM) modules\u00a0<\/span>of<\/span>\u00a0<\/span>SAP<\/span>\u00a0<\/span>provide valuable\u00a0<\/span>tools to\u00a0<\/span>handle<\/span>\u00a0both dropshipping and third-party\u00a0<\/span>situations<\/span>:<\/span><\/p>\n

Automatic Purchase Requisitions:\u00a0Activated<\/span>\u00a0<\/span>on<\/span>\u00a0<\/span>creation\u00a0<\/span>of<\/span>\u00a0TAS or TAB items<\/span>\u00a0sales orders<\/span>.<\/span><\/p>\n

Vendor Coordination:\u00a0Smooth<\/span>\u00a0PO creation and vendor\u00a0<\/span>notification<\/span>.<\/span><\/p>\n

Billing and Invoicing:\u00a0Single<\/span>\u00a0billing cycles for both\u00a0<\/span>vendor<\/span>\u00a0and\u00a0<\/span>customer<\/span>\u00a0invoices.<\/span><\/p>\n

Analytics & Reporting:\u00a0Track<\/span>\u00a0order status, delivery\u00a0<\/span>dates<\/span>, and profitability\u00a0<\/span>reports<\/span>.<\/span><\/p>\n

????<\/span>\u00a0When to\u00a0<\/span>Utilize<\/span>\u00a0Dropshipping vs. Third-Party Process
\n<\/span>Apply<\/span>\u00a0dropshipping when:<\/span><\/p>\n

You don‘<\/span>t want to\u00a0<\/span>carry<\/span>\u00a0inventory.<\/span><\/p>\n

You sell\u00a0over<\/span>\u00a0<\/span>the web\u00a0<\/span>and\u00a0<\/span>desire<\/span>\u00a0<\/span>rapid<\/span>\u00a0fulfillment\u00a0<\/span>through<\/span>\u00a0suppliers.<\/span><\/p>\n

Products are shipped directly from vendors (B2C focus).<\/p>\n

Use third-party business process when:<\/p>\n

Your logistics require intermediate handling.<\/p>\n

You want flexibility in shipping locations.<\/p>\n

You\u2019re managing both B2B and B2C workflows.<\/p>\n

????<\/span>\u00a0Conclusion
\n<\/span>It<\/span>\u00a0<\/span>is important to understand\u00a0<\/span>the\u00a0<\/span>distinction<\/span>\u00a0between dropshipping and third-party processes in SAP\u00a0<\/span>in<\/span>\u00a0<\/span>order<\/span>\u00a0<\/span>to<\/span>\u00a0<\/span>select<\/span>\u00a0the\u00a0<\/span>most<\/span>\u00a0<\/span>appropriate\u00a0<\/span>fulfillment\u00a0<\/span>approach<\/span>. Dropshipping is\u00a0<\/span>best<\/span>\u00a0<\/span>suited\u00a0<\/span>for direct, inventory-<\/span>less<\/span>\u00a0sales,\u00a0<\/span>whereas<\/span>\u00a0the third-party process\u00a0<\/span>provides<\/span>\u00a0<\/span>greater<\/span>\u00a0flexibility and control. By\u00a0<\/span>setting<\/span>\u00a0<\/span>up\u00a0<\/span>the\u00a0<\/span>proper<\/span>\u00a0item categories (TAS vs. TAB) and\u00a0<\/span>utilizing<\/span>\u00a0SAP<\/span>‘<\/span>s\u00a0<\/span>built-in<\/span>\u00a0tools,\u00a0<\/span>companies<\/span>\u00a0can\u00a0<\/span>automate<\/span>\u00a0<\/span>processes<\/span>,\u00a0<\/span>minimize<\/span>\u00a0overheads, and\u00a0<\/span>maximize<\/span>\u00a0customer satisfaction.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Dropshipping and third-party business processes are\u00a0widely\u00a0applied\u00a0in\u00a0SAP and supply chain management\u00a0to\u00a0fulfill\u00a0products\u00a0and\u00a0make\u00a0customer deliveries\u00a0while\u00a0not\u00a0stocking\u00a0inventory.\u00a0Though\u00a0both\u00a0rely\u00a0on\u00a0third-party suppliers and\u00a0limit\u00a0inventory handling by the retailer, they\u00a0function\u00a0differently\u00a0in\u00a0SAP and\u00a0involve\u00a0different\u00a0configurations and item\u00a0types. This blog\u00a0describes\u00a0the\u00a0main\u00a0differences between dropshipping and third-party processes in SAP\u00a0and how\u00a0companies\u00a0can\u00a0utilize\u00a0each for\u00a0streamlined\u00a0operations. What is Drop shipping in SAP? Dropshipping is a\u00a0method of\u00a0retail fulfillment\u00a0whereby\u00a0the seller\u00a0never\u00a0holds\u00a0goods in stock. Instead, when\u00a0an\u00a0order\u00a0is\u00a0received\u00a0by a customer, the retailer (seller)\u00a0simply\u00a0passes\u00a0the order to…<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kad_post_transparent":"default","_kad_post_title":"default","_kad_post_layout":"default","_kad_post_sidebar_id":"","_kad_post_content_style":"default","_kad_post_vertical_padding":"default","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[20],"tags":[],"class_list":["post-4661","post","type-post","status-publish","format-standard","hentry","category-sap"],"_links":{"self":[{"href":"https:\/\/gtracademy.org\/staging\/wp-json\/wp\/v2\/posts\/4661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gtracademy.org\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gtracademy.org\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gtracademy.org\/staging\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/gtracademy.org\/staging\/wp-json\/wp\/v2\/comments?post=4661"}],"version-history":[{"count":0,"href":"https:\/\/gtracademy.org\/staging\/wp-json\/wp\/v2\/posts\/4661\/revisions"}],"wp:attachment":[{"href":"https:\/\/gtracademy.org\/staging\/wp-json\/wp\/v2\/media?parent=4661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gtracademy.org\/staging\/wp-json\/wp\/v2\/categories?post=4661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gtracademy.org\/staging\/wp-json\/wp\/v2\/tags?post=4661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}