My vendors do not receive new order notifications and don't see new orders in their interface
Most common causes for that:
- Orders not reaching the status configured in System > Configuration > Drop Shipping > Vendor Options > Make Available to Dropship on Order Status(es).
For example, you're testing with Check/MO payment method, which leaves order in status "Pending", with default configuration of making orders available to dropshippers on "Processing". In this particular case, creating an invoice for the order would bring it to "Processing" and fire up vendor notifications.
You'll need to figure out on what stage you want your vendors to receive the notifications, and update the configuration accordingly.
- Orders were made not using Dropship or Dropship Split shipping methods.
If the regular Magento shipping methods are enabled (flat rate, UPS, FedEx, etc), and customer used them to complete the order, the order will not be processed sing Dropship logic, and the notifications will not be sent to vendors.