Consignment Stock Control Software By TradeGecko
Easing Off Consignment Risks And Having 100% Control Over Your Consignment Stock
An Introduction To Consignment Stock
Consignment stock is stock that is in the possession of the retailer, but is still owned by the supplier. Usually, consignment stock consists of new and unproven products, and very expensive products where sales are questionable.
For wholesalers or suppliers like yourself, consignment stock brings about both additional benefits and drawbacks.
Benefits To Selling Consignment Stock
1. Cost Savings
When you consign stocks, you get to evade inventory carrying costs because the products sit in your retailers’ warehouses or stores. On the other hand, your consignees do not need to put money on the goods they sell, only until after the merchandise has been sold.
2. Gets Products In Front Of End-Users
You get to ride on your retailers’ marketing and sales efforts to push your product sales. Also, consignment gets your products in front of end-users and customers, which is a critical part of the sales cycle.
3. Ease Fear On Clearing Stock
Having consignment stock also eases your retailers’ fear of being stuck with something that may not sell. This increases receptiveness and confidence towards your goods and brand at different stockists because they can avoid investing in products they are unsure of.
Drawbacks Of Consignment Stocks
When you consign goods, you bear the risk of losing your capital investment associated with the consignment stock. Furthermore, your consignee might take advantage of the consignment stock and not get too keen on pushing your products in the market without a good profit sharing incentive.
2. Difficulty In Eyeballing Consignment Stock
You are exposed to higher chances of overstocking or duplicate consignment inventories. This is damaging for both you and your consignees – they spend more on inventory storage costs while your goods pile up and sit idly in their warehouses. Also, discrepancies in consignment stock between you and your retailers could mean lost profit or even leads to distrust in the relationship.
Limited Systems For Managing Consignment Stock
Consignment stocks are always tricky and complicated to handle because they are distributed to many retailers that are situated in different locations. Most inventory management systems don’t handle consignment stock well; it’s the ‘change in ownership without monetary transaction’ part that trips up most software.
This forces a lot of businesses to manage consignment stock via manual processes such as using spreadsheets and back-and-forth phone calls to collaborate with each other. Not only is this time consuming, it brings about so much confusion, human errors, and introduces unnecessary complications to your business.
So if consignment stock is a significant part of your business, you need to look for a system that allows you complete control and full visibility over your consignment stock.
TradeGecko Provides Functions For Managing Consignment Stock
Well fret not, you can sit back and manage your inventory comfortably with certain features on the TradeGecko online inventory management system. Our Multi Locations and Stock Transfer features allow you to track your consignment stock accurately and lowers risks by giving you overview of where your consignment stock lie.
Under the Intelligence segment, you can also view the Stock Location Report and Sales By Location Report to track the volume of each consignment sale at each location, along with how much sales each consignment location brings in. This is immense data and analytics that help you make better business decisions and account for all your stock.
In addition, have a chat with our Sales and Success Teams to find out how you can utilize our software for your specific needs! We’ll be more than glad to explore ways to help you gain full control and visibility over your inventory.
“I sell 90% of my jewelry on consignment to galleries, and this is probably the most relevant and interesting part for me in terms of coming on board with TradeGecko, or searching for an inventory management system in general. I spent three or four months searching for a system before deciding on TradeGecko. The TradeGecko system looks good and the team responded really well. It’s a pleasure to conduct business with such a good system to take care of operations.” - Kiri Schumacher, Kiri Schumacher Jewelry
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“In some cases, a consignment customer may have anything from seven locations to as many as 15 locations, and we go into the Warehouse Location segment to set each individual store up as a separate warehousing location. With this, we know what each individual store has sold and what it should have in its inventory by looking through Sales Orders and Purchase Orders. It allows us to keep very tight reins on our supply chain. We have a tremendous investment in all of the stores that we work with. TradeGecko has allowed us, for the first time, to know exactly the dollar amount we have sitting in our inventory, and exactly what our margins are – that’s tremendous intelligence to have.” - Bruce Brown, American Bedding Solutions
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Download our e-book: How to manage consignment sales and inventory