consignment inventory definition

consignment inventory definition refers to an inventory management method where goods are placed in the possession of a retailer or distributor, but the ownership remains with the supplier or manufacturer until the goods are sold. Under consignment arrangements, the retailer or distributor is not required to pay for the inventory upfront. Instead, they pay the supplier only after the items are sold. This model is commonly used in industries where businesses want to reduce their risk by not purchasing large quantities of inventory, such as in fashion, art, and electronics. Consignment inventory can help sellers expand their reach to new markets while minimizing inventory costs, but it also requires careful tracking and communication between suppliers and retailers.