Inventory glossary

What is Consignment inventory?

Consignment inventory is stock that a supplier places in your store but still owns until you sell it.

Consignment deals let you offer new products without tying up cash, since you only pay for what actually sells. This matters most for small stores testing a new supplier or a new product line without committing to a full purchase up front.

If you run consignment stock, keep it separate from stock you own outright. Track what sells and reconcile with the supplier on a set schedule, whether that is weekly or monthly, so payments and restocks stay accurate and nothing sits on your shelf unsold for months without anyone noticing.

Example

A candle maker places 50 jars of a new scent in your store on consignment. You sell 30 in the first month and pay the supplier for those 30 only. The remaining 20 jars stay on your shelf, still owned by the supplier, until sold or returned.

Common mistakes

  • Treating consignment stock as a free pass on tracking, then losing count of what is actually on the shelf.
  • Forgetting to reconcile sold units with the supplier regularly, which delays payment and confuses records.
  • Mixing consignment SKUs with owned SKUs in reports, which distorts true inventory value and margin.

Consignment inventory and SteadyShelf

SteadyShelf is built around stock you own and reorder through purchase orders, so it is not meant for tracking supplier-owned consignment stock or settling consignment payouts.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related terms

Supplier · Inventory valuation · Dead stock · Inventory accuracy · Stockout

Full inventory glossary

FAQ

Does consignment inventory count as my inventory?

No. Consignment inventory stays on the supplier's books until sold, but it can still run out on your shelf. You need a sell-through trigger, not just an invoice date.

Can consignment inventory still run out of stock?

Yes, if the supplier agrees to restock on a schedule or trigger level. You still need to track what is on your shelf and reorder before it runs out, even though you are not paying until it sells.

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