Lapasar
Logistics & Fulfilment

Consignment Stock

Also known as: Consignment inventory

Consignment stock is inventory held at a buyer's location but owned by the supplier until it is used or sold, at which point the buyer pays for it.

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Under a consignment arrangement, the supplier places goods at the buyer's premises but retains ownership until the buyer draws them down. The buyer only pays for what it consumes, which frees up working capital and reduces the risk of holding stock that may not be needed. The supplier gains a nearby presence and closer customer relationship.

Consignment stock suits high-value, fast-moving or critical items where availability matters but tying up cash is undesirable. It requires accurate usage tracking and clear agreement on ownership, replenishment, obsolescence and payment triggers. It is closely related to vendor-managed inventory, where the supplier also takes responsibility for replenishing the stock it owns.

Frequently asked questions

What is consignment stock?
Consignment stock is inventory held at the buyer's location but owned by the supplier until it is used or sold, at which point the buyer pays only for what it consumes.
What are the benefits of consignment stock?
It frees up the buyer's working capital, reduces the risk of unused inventory and improves availability, while giving the supplier a closer presence with the customer.

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