Fulfillment
Consignment Inventory
Inventory owned by the supplier but stored at the buyer's location until used or sold.
C
Updated 2025-10-01
Definition
Consignment inventory allows suppliers to store goods at a customer's premises while retaining ownership until items are consumed or sold.
Overview
Overview
Consignment inventory improves supply chain responsiveness and reduces buyer inventory costs.
Benefits
- Reduces buyer capital investment
- Improves product availability
- Strengthens supplier-buyer collaboration
Example
A manufacturer keeps a stock of spare parts at a distributor's warehouse, billing only when parts are used.
Tags
#Consignment Inventory#Supplier#Inventory Management#Fulfillment
Related Terms
Vendor Managed Inventory (VMI)
Inventory Turnover
Just-In-Time (JIT)
