Understanding Inventory Levels when Drop Shipping
From the time the order comes in to SellerCloud until the time the order is dropship-requested, there will be a reduction in aggregated quantity to reserve for the order. Once the tracking information is updated the inventory level restores. Under Client Settings you can set the restoration to occur only when the drop ship is acknowledged.
As soon as a drop-ship is requested, it will be considered "Received" and the physical quantity will be updated. When the Drop-ship status is set to Processed and the tracking is updated, the physical quantity will be reduced. For example, if physical quantity = 100 and you request a drop-ship for an order with a quantity of 2, the product's Physical Qty will show 102. When set to Processed and tracking is updated the Physical Qty will revert to 100.
Note: On each vendor's general settings page, you can select in which warehouse inventory adjustments are reflected.