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Managing Online Dropship Vendor Inventory

2021-08-24
9 min read

Learn about:

  • Owned versus Dropship inventory

  • How to create a DSV inventory report

  • Updating and maintaining DSV inventory


With Walmart's push towards a fully omnichannel business model, suppliers must consider both brick-and-mortar instocks and Walmart.com inventory. Managing the online side of the business looks very different, especially with the inclusion of dropship vendors (DSV).

For DSV inventory, the supplier receives the online order and ships it directly to the end consumer. However, It is common for suppliers to have blended freight terms, with fulfillment occurring via Walmart Fulfillment Centers and DSV channels. 

Owned versus Dropship inventory

An owned supplier is a supplier that ships items to a Walmart warehouse or fulfillment center. Walmart houses the inventory and ships it to customers. A dropship vendor (DSV) is a supplier that ships the items directly to customers (or stores). Many of Walmart's suppliers are both warehouse suppliers and DSVs.

From a reporting standpoint, owned inventory is as simple as running a quick Decision Support report called "Inventory Summary." DSV inventory is a bit more cumbersome for the supplier to manage. Walmart has no idea how much stock the supplier has available to ship to Walmart customers without supplier input. For this reason, suppliers must take the necessary steps to update their available DSV inventory using Supplier Center constantly.

DSV inventory reporting

Walmart has no visibility to dropship vendors' internal supply chain, so Walmart has no way to determine when an item should appear as Out of Stock on the public website.

Take this scenario to see how important it is for suppliers to maintain their DSV inventory records in the Supplier Center application. This example would be for a supplier who has both owned and DSV inventory.

  • The Walmart-owned inventory shows six units available to sell.

  • The supplier, who also fulfills via DSV channels, has not entered any available inventory in the Supplier Center application, so the DSV inventory shows as zero.

  • Walmart customers purchase six units from Walmart.com on a given day, thus depleting the available inventory to zero.

  • Zero inventory results in an Out of Stock message on the public website. In other words, the customer cannot purchase the supplier's product!

In the above example, if the supplier properly maintained their available DSV inventory in the Supplier Center application, Walmart.com would still show available inventory for the consumer to purchase.

Managing DSV inventory is a manual process since Walmart.com has no visibility into the supplier's internal inventory systems. This is where the Supplier Center application comes in. To begin this process, navigate to the Supplier Center application in Retail Link.

Downloading the Inventory Spec

  1. In the left navigation menu, under "ITEMS AND INVENTORY," click on "Manage Items."

  2. Above the grid, you will see a button that reads "Update DSV Inventory." Click the button and select Download Inventory Spec. This option will give you a blank "Inventory Spec" in Excel (.xlsx) format.

Download Inventory Spec spreadsheet from Supplier Center

Filling out the Inventory Spec

Once you've downloaded the Inventory Spec, fill out the following four fields for each item in the Inventory Spec.

Inventory Spec Excel Spreadsheet

  • SKU: The unique identifier you created during Item Setup. Type your SKU into the cell. If you don't remember your SKU, you can find it by downloading the Item Report.

  • Availability Code: Availability Codes help us identify how to manage the inventory. Select from the following two codes in the Spec:

    • AC: The standard code used for inventory updates. Unless your item has infinite inventory, you should select AC. 

    • AA: The code to indicate that your inventory is infinite and never runs out. If you select AA, you will not need to provide a quantity. This code is typically for suppliers who fulfill on-demand, procuring inventory as they receive orders (e.g., gift cards or warranties). 

  • Quantity: The total number of units on hand in a particular distribution center. This number includes both your available to sell units and units in processing that you haven't shipped yet. If you select AA as your item's Availability Code, you can leave the Quantity column blank.

  • Fulfillment Lag Time: Also referred to as “Lead Time”, your fulfillment lag time is the amount of time it takes the supplier to process incoming orders prior to shipping. This number does not include transit time. If you produce your items post-order, include production time in this field.

Note: If you have multiple distribution centers set up with Walmart, you should fill out a separate Inventory Spec for each distribution center.

Save your file.

Uploading the Inventory Spec

Once you've completed the Inventory Spec, follow these steps to upload your file:

  1. In the left navigation menu, under "ITEMS AND INVENTORY," click on "Manage Items."

  2. Above the grid, you will see a button that reads "Update DSV Inventory." Click that button and select the option "Upload Inventory Spec."

  3. On this page, you can either drag and drop your file(s) or click "Upload Spec" to select files from your computer. 

    1. If you have multiple distribution centers set up, you will need to select the distribution center whose inventory you are updating. 

    2. You will only be able to submit your updates for one distribution center at a time, although you can submit multiple files at once for that specific distribution center. 

  4. Once you have uploaded your file(s), click the blue "Submit" button to begin processing the file. This page will close, and your file will begin processing.

Upload the Completed Inventory Spec spreadsheet

Note: You must upload the files in the same format as you downloaded them, which is .xlsx format. Supplier Center accepts no other file formats for inventory uploads (e.g., CSV files).

Tracking Feed Status and resolving errors

Once you've submitted an Inventory Spec, you will want to track the status of your file and the items you updated. Be aware that feeds can take up to 48 hours to process. If you do not see your update(s) immediately, please allow 48 hours to pass and check again before submitting a ticket for Partner Support.

  1. In the left navigation menu, under "FEED MANAGEMENT," click on "Feed Status."

  2. Above the table, select "Inventory" from the "Viewing" drop-down to see all of your inventory feeds. It may take up to a minute for your new feed to appear.

    View Inventory Feeds

  3. The third column in the table is the "Feed Status" column. You should use this column to track the status of your feed. There are four different feed statuses:

    • Feed Received: You uploaded the files. But the system hasn't begun processing them yet. All of the columns in the table will show 0.

    • Feed Processing: The system is checking your files. The "Submitted" column will display the number of lines submitted in this feed. The "Pending" column indicates the number of SKUs in the feed which has finished processing.

    • Feed Error: There was an error with the file that you uploaded. You must reupload your feed.

      1. If there are items with errors, click Download Errors under the Error File column. This file will explain which SKUs had errors.

      2. Fix the errors in your original Inventory Spec and then reupload it, or fill out and upload a new Inventory Spec with only the SKUs that had errors.

    • Feed Processed: Your feed has finished processing. The number of items that have completed processing is in the "Processed Items" column. Your items now have inventory unless there were items with errors in the feed. The number of errors in your data is in the "Items with Errors" column. If you have errors, follow the steps below to fix them.

Download any errors for investigation

Viewing updated inventory

Once your inventory has processed, you can view your inventory on the "Manage Items" page. The "Available Units of Inventory (DSV Only)" column is the sum of the merchandise for all of your distribution centers. This column allows you to quickly identify the total amount of inventory available for customers to purchase.

View updated inventory

You can view your inventory at the distribution level for a particular item by clicking on a number in the "Available Units of Inventory (DSV only)" column. You will see a table with four columns: 

  • Distribution Centers: The facility name and ID for each distribution facility you set up in Supplier Center.

  • On Hand: The total number of inventory units available for a customer to purchase.

  • Available to Sell: The number of inventory units on hand minus the number of units you are in the process of shipping. 

  • Lag Time (Days): The maximum number of days it takes you to process an order before shipping it. This number doesn't include transit time. Only approved DSVs that ship customized or post-order manufactured items should see a value greater than zero. For more details about requesting lag time, please see Fulfillment Lead Time.

View DSV inventory at DC level

In summary

While owned inventory occurs in Decision Support, DSV inventory reporting comes from the Supplier Center. Blended freight terms suppliers (those who have both owned and dropship inventory) must complete the processes for updating DSV inventory regularly to avoid Out of Stock messages on Walmart.com.

Don't forget sales!

Along with tracking inventory, DSV suppliers like you need to also track sales! Use SupplyPike's Retail Intelligence app to view actionable insights into your online sales metrics.

Retail Intelligence – Online Sales metric

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Tim Carey
Meet the author

Tim Carey

Tim has been in the Walmart supplier community for over 15 years. His expertise is in Consulting, Business Analytics, and Retail Link for Walmart suppliers.

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