Looking at the current economy, it is clear to see that inflation is at a 39-year high. With this record-breaking spike comes increased costs for essential items, not to mention the prevalent supply chain and labor shortages.
Coming out of the pandemic, this state is not ideal for consumers and businesses alike. Customers don’t want to spend a lot for the goods and services they need, which then reduces profits for businesses, and the cycle continues. However, there is a solution to help both parties – consignment.
What is Consignment?
Consignment is a type of business arrangement in which the consignee, or a business, pays the consignor for merchandise once the item sells to a customer. The consignor serves as a third-party seller that receives a percentage of the sale revenue as a commission.
Each consignment business varies in their pricing agreement between the consignee and consignor. Consignment shops are becoming more and more popular in the last few years as consumers can get gently used goods for a fraction of the price, while consignees can get rid of any unwanted goods they’ve been holding on to.
- Consignment is an arrangement in which goods are left with a third party to sell.
- The party that sells the goods on consignment receives a portion of the profits, either as a flat rate fee or commission.
- Selling via a consignment arrangement can be a low-commission, low-time-investment way of selling items or services.
- Most consignment shops and online dealers will offer terms, but some are willing to negotiate.
- Consignment is a good workaround if you don't possess a physical store or online marketplace in which to sell your goods.
What Goods Can I Consign?
Consignment shops typically accept all types of goods and merchandise for resale. Beyond clothing and accessories, sales include artwork, books, athletic equipment, furniture, instruments, and more.
Why is Consignment Right for My Business?
As a business owner, the consignment business model has many advantages. Because the consignment shop doesn’t own any of the inventory, any stationary or unsold goods can easily be returned to the owners or disposed of with no financial losses. Another benefit of never owning the inventory is that it removes the need to pay for the goods to be sold, unlike other retailers which must.
Customers and consignors that frequent your consignment business can become a solid clientele. Whether they return often to see what new inventory is in store, or they can count on you to help get rid of their goods, the consignment business model is great for having a stable demand.
Lastly, the consignment business model is a great tool for improving overall cash flow. Payments can be made days or weeks after the item sells.
How Can Order Time Inventory Help?
Order Time’s cloud-based inventory management system can serve as a one-stop shop for all your consignment business’ needs. Our recently added consignment tool is perfect for keeping track of incoming inventory and managing it as sales increase.
The Consignment tool makes it easy to create consignment listings, track customers, mark as items are sold, and more. If you are looking for a low-commission, low-time investment method of selling goods or services, this is perfect for you.
What Now?
To learn more about Order Time’s Consignment Tool and how it can help streamline your business, click here.
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