Consignment Inventory Management Software
What is Consignment Inventory?
Consignment inventory is merchandise (often used) owned by the owner (consignor) and placed 'on consignment' with a seller (consignee, agent) who is in the business of selling others' possessions. Consignment inventory can be anything that can be sold and is usually tangible (cars, trucks, boats, clothing, jewelry, furniture, all types of equipment, music, musical instruments, event tickets, books...).
Consignment inventory stock can also be intangibles like piano lessons, hotel reservations, memberships, time shares.
Consignment inventory differs from two other forms of merchandise which are often sold by those in the business of reselling:
Buy Outright (resale) items are inventory purchased by the reseller in the hope of reselling items for a profit.
Retail items are stock purchased from businesses like suppliers, wholesalers, importers, craftsmen, again with the goal of reselling the items for a profit.
A consignment inventory example: A resale store may not want to buy an item outright but agrees to place the item on the sales floor and to split the sales proceeds with the item's owner, or return the item to the owner after a stipulated number of days.
Consignment Inventory Ownership
Unlike resale and retail inventory, the ownership of consignment inventory remains with the consignor. The consignee may assume responsibility for the inventory and suffer consequences if the inventory is lost, stolen, damaged or destroyed but typically the (written) consignment-inventory agreement between the two parties is that risk remains with the inventory owner. Resellers might assume that responsibility if they have adequate insurance coverage.
Consignment Inventory Management
When consignment inventory is sold a consignment-software program will record the sale, credit consignor and consignee accounts with pre-designated shares, and prepare a 'settlement document' which is typically processed the month after the date of the sale along with payment to the consignor.
Consignment Inventory Accounting Entries
Entries include the name of the owner, an item ID, the date on wich the item was placed on consignment, the date the item is to be returned to the owner (or donated or destroyed or transferred to house ownership), the % of the sale to be paid to the owner, the quantity, a description (including identifying information like condition, serial number, color, etc), a selling price and optionally a discount schedule discounting the time as it remains unsold. As options a category could be assigned to the item and a picture could be taken, stored and recalled at POS (to help avoid price-tag switching).
Inventory Best Practices
With consigment inventory organization is paramount and it extends beyond placing similar items in the same location on the sales floor. Consignment is different in that keeping inventory 'fresh' is key to attracting repeat customers so resale stores routinely donate or destroy unsold items or return them to their owners after a short period of time, typically 90 days. A systematic discounting of sale prices attracts bargain hunters and increases the likelihood that inventory will turn over at a steady pace. Key to these goals is a software program that not only keeps inventory organized but automates discounting and the disposition of unsold stock.
Consignment Inventory Management Software
It's common for consignment inventory stock to be discounted as it remains unsold. This can be done by most consignment-software programs automatically (or manually). Consignors may offer options for disposition of inventory that remains unsold after some period of time (commonly 90 days) as resale stores strive to entice frequent visits by patrons with 'fresh inventory'. Inventory might be destroyed, donated (to charity), transferred to shop ownership but largely returned to the owner.
Some software apps allow consignors (or anyone) to enter inventory online which the consignee can download at his/her place of business to record and print price labels.
It is sometimes possible for consignors to view their account information (inventory, sales, balances) online as well.
Some apps display inventory on resale sites with pictures and with the ability to process sales (ecommerce).
Best Consignment Shop Software
'BCSS' is a very-well-rounded consignment inventory tracking and POS system which include client and employee management, 'point of sale' and extensive reports. A free live demo is available prior to purchase to assume that the program is complete and working properly on the shop computer. No forever payments.