Inventory · Definition

Consignment Inventory

Stock held on your premises but still owned by the supplier until it is used or sold.

Under consignment, a supplier places stock with you and retains ownership until you consume or sell it. You are only invoiced for what is drawn down, which shifts the carrying cost and obsolescence risk back to the supplier.

It requires tight tracking of two things at once: physical quantity on your site and the ownership boundary. Consumption reporting has to be accurate, because it is what triggers the supplier invoice.

Also called