Selling on consignment is when vendors retain ownership of their products and contract with other retailers to store and sell those products. There are loads of articles (‘Selling products on consignment’, ’Consignment’ by Shopify, ‘11 tips when selling through consignment’) out there about consignment selling in traditional retail but barely any are focused on the consignment model in ecommerce. We will focus specifically on the benefits and costs of running a consignment model in ecommerce.
Any business can sell as a consignor or consignee but there are a few common reasons to adopt as both a consignor or a consignee.
When to think about becoming a consignor (putting your inventory in another business):
Strictly a retailer? Here are some questions to ask yourself when considering becoming a consignee instead (putting another business’ inventory in your store):
Brightpearl makes it easy to manage consignments. View a demonstration to find out how it works.
This isn’t something to rush into and there are a few agreements that need to be made before a consignment model can be adopted:
Payment: Even though all consignment agreements are based on payment to vendor after the sale of a product there are a few different ways retailers can settle their debt.
Furthermore, some important replenishment questions to consider are:
Selling on consignment can be lucrative for all involved but relations can quickly become strained because of poor data around inventory levels.
Brightpearl allows vendors and retailers to:
With Brightpearl, consignors can:
…and consignees can manage processes just as easily by:
Need advice on how to get set up? Request a callback and one of our retail specialists will get in touch.