Consignment Inventory

Consignment shifts cash and obsolescence risk to the supplier. It is common when selling through boutiques or when a brand stocks a partner's products.

Does consignment inventory go on the retailer's balance sheet?

Generally no. Because the supplier keeps ownership until the goods sell, consignment stock stays on the supplier's books, and the retailer records the cost only when a unit is sold.

• Vendor-Managed InventoryAn arrangement in which a supplier monitors a customer's inventory and sales data and decides when and how much to replenish, within agreed stock limits.
• Inventory ReconciliationThe process of comparing inventory quantities across systems such as the WMS, ecommerce platform, marketplaces, and accounting ledger, and against physical counts, then investigating and correcting variances.
• DropshippingA model where the seller does not hold inventory; a supplier ships orders directly to the customer.