Stock It or Dropship It: A Decision You Make Per SKU

“Are we a dropship store?” is the wrong question

The usual debate treats dropshipping and holding inventory as two business models and asks which one you are. But each of the costs and benefits lands on a single product. A heavy item that sells a few times a month costs you shelf space, freight and tied-up cash whether or not your bestseller is doing well. A product that sells every day but reaches customers late, in a separate parcel, costs you goodwill no matter how much of the rest of the catalog ships from your shelf.

So the decision belongs at the level of the SKU. If you make it product by product, you usually end up with a hybrid catalog: some items sit on your shelf and others ship from the supplier. That isn’t a compromise between two strategies. It’s what you get when every product is judged on its own numbers.

What each side actually trades

With dropshipping, a third-party supplier stores the product and ships it to your customer. With stocked inventory, you buy it, store it and ship it yourself. Each choice gives up something to get something.

Trade-off	Dropship this SKU	Stock this SKU
Upfront capital	None. You pay after the customer does	Committed when you place the order
Buy decision	None. No quantity, no reorder timing	Yours: how many, and when to reorder
Margin	Usually thinner, because the supplier takes a cut for fulfillment	More room, since you buy wholesale and set your own price
Ship time & packaging	Set by the supplier	Yours to control, unboxing included
Bundling in one parcel	Lines from different suppliers arrive separately	Items you stock ship together
Returns & complaints	Still yours, even though you never touched the item	Yours, and handled from your own stock

Each row is a cost or benefit attached to one SKU, not to the whole store.

The last row is easy to forget. Dropshipping hands off storage and shipping, but your customer bought from you. Quality complaints, delivery questions and returns still come to you. Bundling causes trouble in a similar way. When one order holds items from several suppliers, it arrives in several parcels. That means more shipping cost, a delivery that comes in pieces, and the “where’s the rest of my order?” email.

Decide with numbers you already have

Which numbers to look at depends on which way the SKU might move. For a product you stock today, two figures from your stock data do the work.

days of cover = units on hand ÷ average daily sales

money at stake = units on hand × unit cost

Days of cover tells you how long the stock you hold will last. When a stocked item shows hundreds of days of cover, the cash spent on it is sitting idle, and that makes it a dropship candidate. Money at stake tells you which of those calls to make first. A slow item worth a little cash can wait. A slow item tying up real money should be looked at this week.

A dropshipped product has nothing on hand, so both of those formulas come out to zero for it. The signal on that side is average daily sales. Steady, proven sales that have held up for months suggest the product could earn shelf space. That’s especially true if customers complain about how long the supplier takes to ship, or if the item is often ordered alongside products you stock and arrives in its own parcel. To see what stocking it would cost, multiply daily sales by unit cost and by the days of cover you would plan to hold.

Worked example

A bulky floor lamp that you stock sells about 0.5 units a day, and you have 150 on hand: 150 ÷ 0.5 = 300 days of cover, close to a year of cash on a shelf it barely fits on. A small accessory that you dropship sells a steady 9 a day. It’s often ordered with items you stock, so it arrives in a second parcel. At a $6 unit cost, holding 30 days of cover would mean 9 × $6 × 30 = $1,620 tied up. The lamp leans toward dropship, and the accessory leans toward stock if that $1,620 is affordable. (Illustrative numbers.)

Overstock that’s already sitting on your shelf needs a different fix, which is covered in Overstock Is a Stockout in Reverse. The question here comes earlier: should you be holding this SKU at all?

The SKU types that lean each way

Some product traits push the decision one way before you look at any numbers:

Leans dropship: bulky or heavy items, where storage and freight costs grow with size and weight. Also long-tail or unproven products that don’t yet have a sales record worth betting cash on, and items whose demand is too erratic to plan a buy around.
Leans stock: proven, steady sellers. Also items customers usually buy together, so they arrive in one parcel, and products where shipping speed or the unboxing is part of what the customer pays for.

Treat these as starting points, not rules. Plenty of SKUs fit both lists, like a heavy item that sells steadily or a small item with no sales history. For those borderline cases, use the signal for the direction in question. For a stocked SKU, that’s days of cover and money at stake. For a dropshipped one, it’s steady daily sales weighed against the cash it would take to hold some.

What changes when a SKU moves

When a dropshipped product becomes a stocked one, the work changes more than the label does. The buy decision comes back: you now choose a quantity, plan around the supplier’s lead time and set a reorder rhythm. Cash is spent before anything sells. You pick which location receives the stock. Customer orders ship from your shelf instead of going to the supplier as a purchase order addressed to your customer.

Moving a product the other way is simpler. You sell through what you have on hand, then make sure the supplier is set up to ship orders directly: an email to order from and, if they use their own product code, a mapping to it.

Assisty has two separate apps: Dropship POs, built for products your suppliers ship directly, and the inventory app’s Smart Buying Table, for what you stock.

If you run the product as…	What Assisty does
Dropshipped (Assisty Dropship POs)	Turns each paid order into one purchase order per supplier, with the customer’s ship-to and the lines that supplier ships, in the supplier’s currency, blind-shipped by default. Reads suppliers from Shopify’s vendor field; you add the email you order from, the currency and, where a supplier uses its own code, a Supplier SKU per product. When the supplier ships, entering the carrier and tracking number fulfills the order in Shopify and notifies the customer.
Stocked (Smart Buying Table, in the Assisty inventory app)	Gives every SKU an AI-suggested quantity computed from sales velocity, lead times and incoming stock, rounded to case sizes and capped at maximum stock levels. Surfaces findings ranked by money at stake, such as items that run out before a reorder can land and capital tied up in overstock. Splits your selection into one PO per supplier and asks which location receives it.

If you run the product as…

What Assisty does

Dropshipped (Assisty Dropship POs)

Turns each paid order into one purchase order per supplier, with the customer’s ship-to and the lines that supplier ships, in the supplier’s currency, blind-shipped by default. Reads suppliers from Shopify’s vendor field; you add the email you order from, the currency and, where a supplier uses its own code, a Supplier SKU per product. When the supplier ships, entering the carrier and tracking number fulfills the order in Shopify and notifies the customer.

Stocked (Smart Buying Table, in the Assisty inventory app)

Gives every SKU an AI-suggested quantity computed from sales velocity, lead times and incoming stock, rounded to case sizes and capped at maximum stock levels. Surfaces findings ranked by money at stake, such as items that run out before a reorder can land and capital tied up in overstock. Splits your selection into one PO per supplier and asks which location receives it.

These are two separate apps, each installed from the Shopify App Store.