How dropship shipping labels work
When a vendor ships a dropship order straight to your customer, it usually ships on its own carrier account and sends you a tracking number by hand. With dropship shipping labels, SKU.io buys the label for the vendor instead. You pay your own carrier rates, the vendor never needs a login, and the tracking number reaches the purchase order (PO) and your customer by itself.
This page explains the model. To turn labels on for a supplier, see Send dropship vendors a shipping label. To work with a label on a PO, see Manage a dropship label on a purchase order. New to dropship POs? Start with How dropship and Amazon POs differ from a standard PO.
Off by default, and two ways to send a label
Shipping labels are switched on supplier by supplier. Each supplier's Dropship settings start with the switch Send this vendor shipping labels.
Off is the default. The vendor ships on its own carrier account and you enter its tracking number when you ship the PO. The supplier's dropship POs show no Shipping label card, no label status in the PO list, nothing about labels in the PO email, and no label section on the vendor's order page. Leave labels off for vendors with better rates than yours, or vendors who won't use another company's labels.
When you turn the switch on, you choose how the vendor gets each label:
| How the vendor gets the label | What happens | Good for |
|---|---|---|
| Send the label with the PO | SKU.io buys the label when you submit the PO and attaches it to the PO email. | Vendors who ship stock items within a day or two |
| Vendor requests it from the portal (selected when you turn labels on) | The PO email carries a Request shipping label button. The vendor opens the order page, confirms the boxes, and says when the order is ready to ship. | Made-to-order or long-lead items, where nobody knows the ship date when the PO goes out |
Turning labels off, or switching between the two ways, only affects labels from then on. Labels already requested or bought keep going.
Where the label is bought
Labels are bought on your account with a label provider you've connected: Shippo, ShipStation, Starshipit or EasyPost. Each supplier can use its own provider. When it doesn't pick one, SKU.io uses the Default label provider in Settings → Purchasing → Dropship Labels.
Wherever the provider appears, it's shown with its logo and name. With ShipStation, for example, you see the Labels via ShipStation chip on the PO's Shipping label card (hover it for the connection's name), Rates from ShipStation when you buy a label yourself, each label's details and history, and the provider lists in the supplier and store settings. Your vendor sees Prepaid label via ShipStation on its order page.
The label ships from the supplier's dropship warehouse, so that warehouse needs a complete address (street, city, ZIP and country). It ships to the customer on the sales order. With Shippo and EasyPost, your store's address is printed as the return address by default, so the parcel looks like it came from you. You can switch the return address to the supplier's warehouse instead. ShipStation and Starshipit labels always show the ship-from address.
The vendor never chooses the carrier service. When the PO's requested shipping method matches one of the provider's services, SKU.io buys that service. Otherwise it buys the cheapest rate among the supplier's Allowed services, or among all services when that list is empty.
Labels are for domestic orders only. When the customer is in a different country from the supplier's warehouse, the vendor ships on its own label, and the PO's Shipping label card says so.
When the label is bought
A label is dated for the day it's bought, and a carrier treats that date as a promise to hand the parcel over. So SKU.io doesn't buy a label early. It buys it on the morning of the ship date.
- The ship date is set. The vendor picks Ready now or On a date on the order page. With Send the label with the PO, the ship date is the PO's estimated ship date, or the submit date plus the supplier's Handling days (counted in business days).
- The label is scheduled. It's bought at the Purchase time in Settings → Purchasing → Dropship Labels (6:00 by default), in the supplier's time zone. A vendor in New York and a vendor in Los Angeles each get their label at 6:00 their own time. A date the vendor picks also becomes the PO's estimated ship date.
- The label is bought and sent. SKU.io buys the label, emails the PDF to the vendor, and shows it on the order page. Ready now, or a date that's already due, buys the label straight away.
Carriers don't pick up on weekends, so a Saturday or Sunday ship date moves to the next Monday. Ship dates can be up to 90 days ahead. Until the label is bought, the vendor (or you) can change the date or buy it right away.
With Send the label with the PO, a ship date within the next few days gets its label straight away, attached to the PO email. A ship date further out sends the PO email now and the label on the ship date. If such a label can't be bought (for example, a product has no weight or size), the PO email goes out with the Request shipping label button instead, and you get an alert. The PO is never held back by a label.
When the order counts as shipped
Buying a label isn't shipping. SKU.io marks the sales order as shipped, and sends tracking to your customer and sales channel, at the label's first carrier scan. The vendor can also click Mark as shipped on the order page once it hands over the parcel.
| Step | What you see on the PO |
|---|---|
| Label bought | Label ready. The sales order isn't fulfilled yet |
| First carrier scan, or the vendor marks it shipped | In transit. A dropship fulfillment with the label's tracking is added to the sales order. Your stock isn't touched |
| Carrier delivers | Delivered |
The label's cost is recorded as the shipping cost on that fulfillment when it ships, never when it's bought. A label that's voided never reaches your books.
ShipStation doesn't send tracking updates, so for its labels SKU.io treats the order as shipped at the end of the ship date (11:59 PM in the supplier's time zone), unless the vendor marks it shipped first. A ShipStation label goes Label ready → Shipped and never shows In transit or Delivered. The vendor's order page asks it to click Mark as shipped once the carrier has the parcel.
You can turn off Hold customer / channel fulfillment until the first carrier scan. The order is then marked shipped as soon as the label is bought, so your customer sees "Label created" earlier.
Unused labels are voided
Paying for labels that never ship wastes money. SKU.io voids a label, and the provider refunds it, in these cases:
- Nobody uses it. A bought label with no carrier scan after the Auto-void after setting (10 days by default, up to 25) is voided. The vendor is emailed, and can request a new label when the order is ready.
- The order is cancelled. Cancelling the PO or the sales order cancels a scheduled label and voids a bought one, and the vendor is told not to ship.
- The customer's address changes. The old label is voided and the vendor is asked for a new request.
- The vendor ships on its own label anyway. When a PO is shipped with a different tracking number, the unused label is voided.
A label the carrier has already scanned can't be voided. Some providers refund a few days later, and the label shows Void pending until they do.
Replacing a label
If the box changes or a label is damaged, the vendor clicks Need a different label? on the order page, gives a reason and the new box size, and gets a replacement. The old label is voided. The supplier's Max re-labels per PO setting (2 by default) caps how many replacements the vendor can make itself. After that, the vendor is asked to contact you. You can always void and buy a new label from the PO.
When the PO's lines or quantities change after the label is bought, the PO shows PO changed after label, and the vendor's next replacement doesn't count against the cap.
Shipping part of an order
A vendor that ships an order in more than one box on different days can tick Ship only some items and choose the quantities in this shipment. Each shipment gets its own label and fulfills only its items. The PO then shows the remaining items with a Request another label button. A PO can have several bought labels, but only one waiting to be bought at a time.
Reminders
When Remind vendors who haven't requested a label is on, a vendor set to Vendor requests it from the portal that hasn't asked for a label gets one reminder email. It goes after the supplier's lead time, or after 3 days if no lead time is set.
Next steps
- Send dropship vendors a shipping label: turn labels on for a supplier and set the store defaults.
- Manage a dropship label on a purchase order: buy, reschedule, resend and void labels, and see what your vendor sees.
- Ship dropship POs and mark Amazon POs as shipped: ship a dropship PO by hand.