Consignment stock
Quick answer
Goods physically at the buyer but owned by the supplier until actual sale or consumption.
Key takeaways
- The supplier delivers consignment stock (no ownership transfer)
- The buyer reports consumption/sales periodically
- Invoicing covers the consumed quantity (often via self-billing)
- Remaining stock is replenished or returned
What consignment is
Consignment stock is goods delivered by the supplier and stored at the buyer, but remaining the supplier's property until sold or consumed. The buyer pays only for what it actually uses.
How it works
- The supplier delivers consignment stock (no ownership transfer)
- The buyer reports consumption/sales periodically
- Invoicing covers the consumed quantity (often via self-billing)
- Remaining stock is replenished or returned
Why it matters
Consignment reduces the buyer's tied-up capital and overstock risk, while the supplier gains presence at the point of sale. It requires precise ownership tracking.
How CRMconnect helps
The CRMconnect WMS tracks consignment stock separately (by owner), reports consumption to the supplier via portal/EDI and triggers correct invoicing - with no ownership confusion in inventory.
Real-world example
A parts manufacturer keeps consignment stock at 20 auto service centres. With CRMconnect WMS, each consumption is reported automatically, the invoice is issued on real consumption, and replenishment triggers at the minimum threshold.
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Frequently asked
Who owns consignment stock?+
The supplier, until actual sale or consumption at the buyer. That's why it must be tracked separately, by owner, in the WMS and accounting.
Difference between consignment and VMI?+
VMI concerns who manages replenishment (the supplier decides when to refill); consignment concerns stock ownership (it stays with the supplier until consumed). They are often combined.
Where CRMconnect fits
Related terms
VMI (Vendor Managed Inventory)
The supplier manages stock at the customer/shelf - orders are triggered automatically at threshold, not issued manually.
FinanceSelf-billing
The model where the buyer issues the invoice on the supplier's behalf, based on confirmed receipt.
B2B commerceSupplier portal
A platform where suppliers see your orders, confirm dates, send ASNs and invoices, and track their payments.
LogisticsInventory turnover
How many times stock is fully sold and replenished in a period - a measure of capital efficiency.