Inventory how-to

How to manage inventory for consignment products

Consignment inventory means you hold stock but only pay the supplier once you sell it.

Short answer: Consignment inventory means you hold stock but only pay the supplier once you sell it. Track it like normal stock in your store for selling and fulfillment purposes, but keep a separate record of what you owe and settle it on a schedule you agree with the supplier.

Separate ownership from stock tracking

Your store system should show consignment items as regular on-hand stock so staff can sell and fulfill orders normally. But ownership and payment are a different question. Keep a simple side record, a spreadsheet works fine, listing each consignment item, the agreed cost you owe per unit, and the date it arrived.

Reconcile and pay on a schedule

Agree a settlement period with the supplier, weekly or monthly. At the end of each period, pull a sales report for the consignment SKUs, multiply units sold by the agreed cost, and pay that amount. Update your spreadsheet to remove paid units so you do not double-pay later.

Reordering still needs real numbers

Consignment stock still runs out and still needs reordering before it does. Treat the daily sales rate the same way you would for owned stock: watch how fast it sells, and set a reorder point based on the supplier's lead time plus a safety buffer, so you are not caught empty while waiting on a new drop-off.

Returns and unsold stock

If you can return unsold consignment items, track how long items have sat without selling so you know what to send back before any agreed review date. This is a manual check since it is specific to your consignment terms.

Step by step

  1. List each consignment SKU with its agreed cost and arrival date in a separate tracking sheet, not mixed with your owned inventory costs.
  2. Treat consignment items as normal sellable stock in your store for day-to-day selling and fulfillment.
  3. Pick a settlement schedule with each consignment supplier, for example every two weeks or monthly.
  4. At each settlement date, run a sales report for those SKUs, multiply units sold by agreed cost, and pay the supplier.
  5. Mark paid units off your tracking sheet so you never pay twice for the same sale.
  6. Monitor sell-through speed on consignment items just like owned stock, so you can flag a reorder or restock before you run out.
  7. If your consignment terms allow returns, note how long slow-moving items have sat on hand so you can return them before any deadline.

Worked example

A supplier drops off 50 units of a candle on consignment at $8 each, no payment due until sold. Over the next 28 days you sell 20 units, so you owe the supplier 20 x $8 = $160 at the end of the month. Daily sales work out to 20 / 28 = 0.71 units per day. If the supplier's lead time for a new drop-off is 10 days and you want 5 days of safety stock, your reorder point is 0.71 x (10 + 5) = about 11 units on hand, which tells you when to ask for a top-up.

How SteadyShelf helps

SteadyShelf can forecast sell-through and give you a reorder point for a consignment SKU the same as any other variant, which helps you know when to ask the supplier for more stock. It does not track ownership, what you owe, or consignment payment terms, so you still need a separate spreadsheet or ledger for the financial side.

$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.

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

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FAQ

Can SteadyShelf tell me how much I owe a consignment supplier?

No. SteadyShelf forecasts sales and reorder timing, not cost owed or payment terms. Keep a separate record of agreed unit cost and units sold to calculate what you owe.

Will SteadyShelf generate a purchase order for a consignment restock?

Yes, it can draft a purchase order based on forecasted need and email it to the supplier for approval, the same as for any supplier. You still handle the consignment payment terms outside the app.

Let SteadyShelf do this math for every SKU

Order-by dates per supplier, seasonal forecasts and draft POs for your Shopify store. $29/month after a 30-day free trial.

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