What Is Consignment Inventory & How Does It Operate?
Stocking retail merchandise often involves the retailer buying goods from the supplier and then selling those products for a profit. In contrast, if the consumers don’t buy enough goods, the store is left with unsold goods that they must either mark down or offload.
Consignment inventory is helpful in this situation. Because the vendor or supplier (the consignor) keeps ownership of the goods until they are sold, consigned inventory lowers the retailer’s risk. This implies that the merchant, the consignee, need not buy goods upfront.