Sometimes the goods on a purchase order never pass through your stockroom - your supplier ships them straight to your customer. Two separate things follow from that, and Stockroom keeps them separate: where the order ships, which decides the address on the document, and stock handling, which decides whether the order touches your Shopify inventory. The usual dropship order is both - it ships to your customer and does not update your stock, so nothing is pushed to inventory and you mark the order delivered instead of receiving it. Costs still count either way, so your reports stay right.
Make a purchase order dropship
There are two ways to make one yourself:
From a Shopify order - on the order's page, open More actions and choose Create PO. When the order has a customer shipping address, the dialog asks where the purchase orders should ship: Store address or Customer's shipping address. Choose the customer and every created draft is a dropship purchase order with the customer's address as its ship-to. When no customer shipping address is available, the dialog says the drafts will ship to your store address instead - you can still make one dropship afterwards.
On any draft - click Edit ship-to, type the delivery address, and tick This ships straight to a customer. Use location address clears both the address and the flag. That checkbox is the address only - stock handling is its own choice, below.
Both choices can only change while the order is a draft - marking it as ordered locks them in, because an order that already promised incoming stock has to retract exactly what it promised. A dropship order shows a Ships to customer badge next to its status, so you can always tell at a glance.
Stock handling: does the order touch your inventory?
Whether an order updates your stock is set in three places, and the most specific one wins:
On the order - the Details card on a draft, as Updates my stock or Does not update my stock. An order that does not shows a Not stocked badge beside its status.
On the supplier - Stock handling on their page, for a dropshipper you never receive into stock. Leave it on Use my store default and it follows the setting below.
For the store - Settings > Stock handling sets what new purchase orders do. Changing it only affects orders created from then on.
Set none of them and nothing changes from how Stockroom has always behaved: an order shipping to your customer leaves your stock alone, and every other order updates it.
Why would a dropship order update your stock? Because some stores treat dropship as a location. Shopify lowers that location to -1 when the customer's order is fulfilled, and receiving the supplier's shipment brings it back to 0, so the location shows what is out at your supplier. To work that way, set the supplier - or that order - to Updates my stock and keep the customer's address as the ship-to.
Two things have to line up. The product has to be inventory-tracked in Shopify, or nothing comes off the location when the customer's order is fulfilled and receiving only ever adds. And the customer's order has to be fulfilled from the same location you receive into - if Shopify routes it elsewhere, the unit stays on your dropship location and comes off one that never had it.
What changes (and what doesn't)
This is what an order set to Does not update my stock does differently:
Marking the order as ordered doesn't add incoming stock in Shopify - the units were never coming to you.
Receiving becomes Mark as delivered: the same card, the same partial deliveries, but no location picker and no inventory update. Record what reached your customer and the true costs - the card says it plainly: your Shopify stock never changes.
Mark all delivered is the one-click version, exactly like Receive all on a stock order.
When everything's in, the order's status reads Delivered instead of Received.
Undo works the same - every delivery in the order's history has an Undo button that reverses the costs it recorded.
Everything else behaves like any purchase order: the PDF and supplier email print the customer's address as the ship-to, backorders and cancellations work the same, and the order counts in your spend and supplier reports.
Costs count on the sale, never in stock value
Delivered dropship items go straight into cost of goods sold on the date of the customer's order (or the delivery date, if the purchase order wasn't created from an order), at the exact cost on the purchase order. They never enter your inventory valuation - there's no stock to value - so the Margin and COGS reports stay honest for both sides of your business.
Tracking and the customer's shipping notification
On a dropship order created from a Shopify order, each shipment you record - with Mark as on the way, or arriving automatically from a supplier connected on Stockroom Network - can fulfill the source order in your store with the same tracking, so your customer gets the normal Shopify shipping notification. Use the shipment's Fulfill order button, or grant the optional fulfillment permission when Stockroom asks and new shipments fulfill the order automatically.
Create them automatically
You don't have to click at all: turn on Automation in Settings and new orders containing items from your dropship suppliers create these purchase orders on their own - drafted for review, or marked as ordered and emailed. See Create dropship purchase orders automatically.
Good to know
An order set to Does not update my stock never shows as incoming in Shopify, doesn't appear in a product's incoming count, and doesn't reduce reorder suggestions - your restocking maths only counts stock that's actually on its way to you. One set to Updates my stock counts in all three, like any other purchase order.
If a dropship-only product is inventory-tracked in Shopify, the customer's order itself still lowers that Shopify stock when it's fulfilled - most stores untrack products they never hold.
A dropship order's deliveries still record costs into cost history, so the price you actually paid is always on file per delivery.
Running a drop shipping store? Stockroom for drop shippers covers the whole workflow, including what to avoid for now.