Consignment inventory is a supply arrangement where the supplier retains ownership of goods until they are sold by the retailer. The retailer only pays for what sells and can return unsold items.
Consignor sends inventory to the retailer (consignee). Ownership stays with the supplier.
Consignee displays and sells goods. Title transfers to customer at point of sale.
Consignee remits the agreed amount per sale. Unsold items may be returned.
| Factor | Consignment | Wholesale |
|---|---|---|
| Who owns the goods? | Supplier (until sold) | Retailer (after purchase) |
| When does retailer pay? | After items sell | At time of order/delivery |
| Unsold inventory | Can be returned | Retailer's problem |
| Inventory risk | Supplier bears risk | Retailer bears risk |
| Cash flow for retailer | Better (no upfront payment) | Worse (capital tied up) |
| Supplier margin | Often lower (more risk) | Often higher |
✓ No upfront inventory cost
✓ No risk on unsold goods
✓ Can test new products safely
− Lower profit per sale
− Must track supplier's inventory
✓ Get shelf space without sales effort
✓ Reach customers through retailers
✓ Maintain brand presence
− Bear all inventory risk
− Delayed payment (after sale)
StockZip helps you track inventory regardless of ownership. Tag consigned goods separately, track sales, and generate reports for supplier settlements.
Common questions about scanning, offline mode, pricing, and migration.
Consignment inventory is stock owned by a supplier (consignor) but held and sold by a retailer (consignee). The retailer only pays for items after they are sold to end customers.