There is always a certain amount of risk that comes with purchasing inventory the traditional way. Products can be overstocked on a retailer’s shelves–or in their warehouses–for weeks without a single sale, and the longer that inventory goes unsold, the more financial loss they will encounter. One of the ways that many retailers and manufacturers have worked to offset the risks of traditional inventory is through a consignment inventory model. 

The advantages of parts consignment inventory 

Consignment inventory is a more recent supply chain model that gives control and ownership of goods to the manufacturer, wholesaler, or supplier, until the retailer sells the products. Then, the retailer pays the supplier for what is sold and returns any unsold inventory. The main advantage of this model is that the retailer can avoid excessive markdowns and the need to throw out stock that they didn’t sell. The manufacturer or supplier also has the advantage of maintaining ownership of the inventory until the parts are sold. 

There are other advantages as well for both the consignors (the manufacturers, wholesalers, or suppliers) and the consignees alike. Consignors can avoid inventory carrying costs, the inventory costs associated with holding inventory and they can also use consignment inventory to gauge the interest in their products before committing to creating and storing a large volume of parts. Consignees on the other hand get  to choose a wider variety of parts to sell, avoid markdowns and inventory losses, and enjoy increased product visibility. 

How Global Precision Mitigates Risks through Parts Consignment Inventory

When it comes to the manufacturing side of things, Global offers consignment inventory management services to store our customers’ products until the moment when they need to be integrated into larger machinery or an assembly. Our entire process is automated and transparent so that our customers have complete visibility of their inventory. We offer a program that eliminates time-consuming reconciliations while allowing our customers to maintain and even promote an expansive inventory without the risk and costs associated with maintaining it on site. 

Interested in working with Global Precision Parts? Request a quote today.