How do sell form sellers ship their item and follow its progress?

Sellers without a Resale App account can't create their own shipping label. Once they accept your offer, create the label from the offer in your admin and send it: they get an email with the label to print. See How can I generate shipping labels in my admin account?

Without an account there is no status page, so they follow along by email. They hear from you when you receive their submission, send an offer, send a label, receive the item and pay them (and when a consigned item is listed, if you turn that email on), and they can reply to any of these emails.

On Pro and Enterprise, sellers who create a Resale App account with the same email can also follow their items there, and create their own label if you allow it.