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Top 5 Challenges Businesses Face When Implementing NetSuite Dropshipping Successfully
Table of Contents
- Why NetSuite Dropshipping Is Powerful but Complex
- Challenge #1: Manual Purchase Order Creation
- Challenge #2: Supplier Routing & Multi-Vendor Complexity
- Challenge #3: Inventory Sync & Stock Accuracy Issues
- Challenge #4: Fulfillment Visibility & Tracking Gaps
- Challenge #5: Scaling Automation Across Channels
- How Flxpoint Simplifies NetSuite Dropshipping
- Conclusion
Why NetSuite Dropshipping Is Powerful but Complex
NetSuite offers a built-in dropship feature that works well for small-scale operations; one vendor per SKU, limited order volume, clean accounting. But once you're handling hundreds or thousands of orders across multiple vendors, the cracks start to show.
When a sales order comes in for a dropship item, NetSuite automatically creates a linked purchase order to the preferred vendor. You can even configure it to email that PO. This keeps your accounting clean, recording revenue and COGS without adding stock to inventory. If you have one vendor per SKU and a small order volume, this native flow works.
Reality hits fast. Most vendors don't just accept emailed POs. Some demand EDI, others provide APIs, some send CSVs or XMLs. NetSuite doesn't handle that diversity. NetSuite won't reflect vendor inventory unless you import it.
That leads to overselling. Tracking numbers? Staff manually copy-paste them into item fulfillments. Returns? Without customization, they pollute your inventory records.
Even worse, high volume puts strain on scripts and API calls, triggering NetSuite governance limits. Suddenly, your automated workflow is manual firefighting.
This article walks through the 5 biggest challenges businesses face when implementing NetSuite dropshipping and how to fix them.
Challenge #1: Manual Purchase Order Creation
The Problem
Creating item records in NetSuite is the first step to dropshipping, and it's where the pain begins. Dropshipping is a different flow from traditional retail. It's all about volume; thousands or hundreds of thousands of SKUs.
Each item record requires specific configuration. You need to enable the drop ship flag on every single item record. You need to predefine the preferred vendor. If you have multiple vendors, you need to add each one with their specific pricing. One mistake; wrong vendor, wrong price, wrong flag; leads to downstream order issues and reconciliation headaches.
It can take 5 to 15 minutes to create a single item record in NetSuite. When you're dealing with the volume that comes with dropshipping, it becomes untenable.
Unlike traditional retail where you know exactly what inventory you want to sell, dropshipping requires filtering. You might have access to a vendor's entire catalog; hundreds of thousands of items; but you don't plan on selling all of them. Without a good filtering system, you end up creating millions of item records for stuff you're not even selling.
Why It Matters
Manual item creation is timeconsuming and errorprone. With dropshipping volumes, human intervention at scale doesn't work. You need automation.
What You Need
A NetSuite connector that lets you browse vendor inventory before creating item records. A way to filter out products you don't plan to sell. Automated bulk creation that handles drop ship flags, vendor associations, and pricing without manual clicks.
Challenge #2: Supplier Routing & Multi-Vendor Complexity
The Preferred Vendor Trap
NetSuite's only automation for creating purchase orders is based on the preferred vendor. You set one vendor per SKU. When a sales order comes in, NetSuite cuts a purchase order to that vendor. That's it.
This works fine if you have one vendor per SKU and never want to change. But most businesses don't operate that way.
The Overlap Problem
In NetSuite dropshipping, it's common for multiple vendors to carry the same items. You might have 3 vendors that can fulfill the same SKU. NetSuite's preferred vendor logic doesn't account for overlap. It doesn't let you route based on actual business logic; margins, stock availability, shipping distance, or delivery times.
A lot of businesses tell the same story: "I don't want to send it to a preferred vendor. My preferred vendor is my least expensive vendor. And that changes with shipping costs, freight charges, and vendor pricing updates."
NetSuite doesn't give you live visibility into cost data to know which vendor will get you the best margin. It also can't protect you from split orders. If a multi-line item order comes in and two items have different preferred vendors, NetSuite splits the order automatically. No consideration for customer experience or shipping efficiency.
Manual Overrides
Most businesses using NetSuite for dropshipping end up manually reviewing every purchase order. They check who has stock, who has the best price, and who's closest to the customer. Then they override NetSuite's preferred vendor assignment.
At high order volumes, this isn't sustainable.
What You Need
Dynamic order routing that picks the best vendor based on your business rules; not a static preferred vendor setting. Real-time inventory and cost data. Logic that minimizes split orders and optimizes margins.
Challenge #3: Inventory Sync & Stock Accuracy Issues
The Overselling Problem
NetSuite’s dropship won't reflect vendor inventory unless you import it. If you don't have a live feed of vendor stock levels, you're selling blind. That leads to overselling.
A customer orders an item. NetSuite creates a sales order and a purchase order to the preferred vendor. The vendor comes back and says they're out of stock. Now you have to tell the customer you can't fill the order, or you have to manually switch vendors and update the purchase order.
Manual Inventory Updates
Some businesses try to solve this by importing vendor inventory files into NetSuite manually; CSVs, spreadsheets, whatever the vendor provides. But vendors update inventory at different frequencies. Some update hourly, some daily, some weekly. Manual imports don't keep up.
Without real-time inventory sync, you can't trust your stock levels. You can't prevent overselling. And you can't route orders to vendors who actually have the product in stock.
What You Need
Automated inventory sync that pulls vendor stock levels in real time. A system that prevents overselling by only displaying items that are actually available. Integration with vendors via API, EDI, or file feeds; whatever they support.
Challenge #4: Fulfillment Visibility & Tracking Gaps
Tracking Number Copy-Paste
When a vendor ships an order, they send tracking information back; sometimes via email, sometimes via a portal, sometimes via a file. In NetSuite, staff manually copy-paste tracking numbers into item fulfillments. At high volumes, this is a full-time job.
Manual entry introduces errors. Tracking numbers get mis-typed. Item fulfillments don't get created on time. Customers don't get shipping notifications.
No Visibility Into Vendor Fulfillment
NetSuite doesn't give you real-time visibility into vendor fulfillment status. You don't know if the vendor has processed the order, when they plan to ship it, or if there's a delay. You find out when the customer calls asking where their order is.
Returns Pollution
Returns are another gap. When a dropship item gets returned, NetSuite doesn't handle it cleanly without customization. If you receive the item back into inventory, it pollutes your inventory records; because it was never supposed to be in your inventory in the first place.
What You Need
Automated creation of item fulfillments with tracking when vendors ship orders. Real-time visibility into vendor fulfillment status. A clean way to handle NetSuite’s dropship returns without affecting inventory records.
Challenge #5: Scaling Automation Across Channels
Limited Native Integrations
NetSuite doesn't have native ecommerce sales channel connectors. If you're selling on Shopify, BigCommerce, Amazon, or Walmart, you need a third-party app or custom integration to get order data into NetSuite.
That's one integration per sales channel. Each integration needs to be maintained. Each one can break when a platform updates its API.
Vendor Connection Gaps
NetSuite's built-in vendor communication options are limited. You can email a purchase order to a vendor. That's about it. If the vendor requires EDI, API, or file feeds, you're building custom integrations or hiring a developer.
Each vendor has their own requirements. Some vendors provide APIs, some only accept EDI, some send inventory via FTP, some email CSVs. Managing all of those connections without a unified system is painful.
Governance Limits
As your business scales, you hit NetSuite governance limits. NetSuite’s dropship caps the number of API calls and script executions you can run. High volumes of orders and custom scripts trigger those limits. When you hit them, automation stops working.
What You Need
A unified platform that connects NetSuite to all your sales channels and vendors. Pre-built integrations that handle API, EDI, and file feeds. A system that doesn't rely on NetSuite scripts for every automation step; so you don't hit governance limits.
How Flxpoint Simplifies NetSuite Dropshipping
Flxpoint is a dropship automation platform that connects all your vendors and channels, no matter how they want to communicate. It sits between NetSuite and your operations, handling the heavy lifting.
Filter and Create Item Records Automatically
Flxpoint's digital product catalog lets you browse vendor inventory before creating item records in NetSuite. You can set up filters based on your criteria; price range, category, vendor, whatever makes sense for your business. Only the products that meet your standards get created as NetSuite item records.
Flxpoint automates bulk item creation, handling drop ship flags, vendor associations, and pricing without manual clicks.
Dynamic Order Routing
Flxpoint replaces NetSuite's preferred vendor logic with dynamic order routing. When an order comes in, Flxpoint checks which vendors have the item in stock, compares cost data, factors in shipping distance, and routes the order to the best vendor based on your business rules.
You can prioritize margins, minimize split orders, or optimize for delivery speed. The routing engine makes the decision automatically.
Real-Time Inventory Sync
Flxpoint syncs vendor inventory in real time via API, EDI, or file feeds. You always know what's in stock. You never oversell. And you can route orders to vendors who actually have the product.
Automated Fulfillment and Tracking
When Flxpoint sends an order to a vendor, it pulls tracking information back automatically and creates item fulfillments in NetSuite. Customers get shipping notifications instantly. No manual copy-paste.
Pre-Built Vendor and Channel Integrations
Flxpoint offers over 100 pre-built integrations with vetted dropship and wholesale suppliers across industries like automotive, firearms, outdoor gear, electronics, and industrial hardware. These integrations handle inventory sync, order routing, product data merging, and fulfillment without manual uploads.
Flxpoint also connects to ecommerce platforms like Shopify, BigCommerce, Amazon, and Walmart. Orders flow from the sales channel into Flxpoint, which routes them to the right vendor and syncs everything back to NetSuite.
No Governance Limit Issues
Because Flxpoint handles automation outside of NetSuite, you don't hit governance limits. NetSuite stays the system of record, but Flxpoint becomes the engine that powers scalable automated dropshipping.
For more on how Flxpoint automates NetSuite purchase orders, check out our guide. To see how NetSuite ecommerce automation works at scale, we've covered that too. And if you're wondering why NetSuite Advanced Order Management falls short for dropshipping, we break it down there.
Conclusion
NetSuite is a powerful ERP, but its native dropship features are designed for simplicity, not scale. Once you're handling hundreds or thousands of orders across multiple vendors, you need more than preferred vendor routing and manual purchase order creation.
The 5 challenges; manual NetSuite purchase order creation, rigid supplier routing, inventory sync gaps, fulfillment visibility issues, and scaling automation across channels; are solvable. You just need the right tools.
Flxpoint bridges the gap. It automates item creation, enables dynamic order routing, syncs inventory in real time, handles fulfillment tracking, and connects all your vendors and channels without hitting governance limits.
If you're ready to fix the gaps in your NetSuite dropship workflows, check out Flxpoint or reach out to see how we can help.