Consignment stock is composed of goods that are legally owned by one party (consignor) but are to be sold, shipped or held in store by an agent (consignee). This type of inventory is prevalent among manufacturers. With a consignment arrangement, the consignor retains ownership of the goods and the consignee is not required to pay for the goods until after they have been sold. The consignee can even decide to return any leftover stock without worrying about monetary repercussions.
The main benefits of consignment deals are as follows:
1) The main benefit to be derived from consignment agreement is that the consignee saves money on inventory costs. As the consignee, pay the consignor only after you have sold the merchandise. This improves cash flow on the part of the consignee.
2) You actually save time since you spend no time waiting for merchandise when you run out of stock. Most often, the consignor automatically replenishes your stock right after you sell some or all of the goods. It is of interest to the consignor to keep you well stocked.
3) It is more convenient compared to a drop ship arrangement because the consignee has merchandise on hand, easily accessible and ready for sale. It is more convenient also because no worries exist about running out of stock because resupplying the merchandise occurs regularly.
Whether you move goods that are consigned or sell your own in-house merchandise, a comprehensive and robust inventory management software is crucial. SIMMS 3013 offers all the features you will need to manage your business. Visit www.simmssoftware.com or email firstname.lastname@example.org for more information.