Consignment inventory

In a supply chain model known as consignment inventory, a product is sold by a retailer, but ownership is held by the supplier until the product is sold. Unsold goods may be returned because the retailer does not actually purchase the inventory until it has been sold. The retailer is typically responsible for handling the logistics and fulfillment processes. They receive the products from the supplier, store them, and handle packaging and shipping when a sale occurs.

With consignment inventory, the supplier or manufacturer often sets the pricing, and the retailer has limited control over pricing adjustments. Product marketing efforts are also influenced by the supplier’s guidelines or requirements.