Dropshipping: Accounting and Mathematical Models
Dropshipping: Accounting and Mathematical Models

Summary/Abstract: The aim of this article is to present the accounting benefits of drop-shipping type transactions, transactions adopted by more and more online retail merchants. The greatest disadvantage of this transaction is that inventory is centralized at the supplier/manufacturer and therefore, the risk of loss of inventory and control over transactions upon it, while the seller is responsible for the product marketing, customer acquisition and delivery costs. Because of this accounting problem, the seller is obliged to pursue the profit for each order, he having advantages only if the price of the supplier does not increase and if the delivery costs do not change. The vendor must also know the optimal amount he must sell for profit. Due to a business environment situated within a permanent change because of the economical crisis, entrepreneurs need to promote electronic commerce and optimal solutions for accounting for a rising profit. To streamline dropshipping transactions, we proposed a model for calculating the optimal quantity of the sold products and a registration into accounting of the dropship bill modality.

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