What is a consignment store?
A consignment warehouse, also called a customer consignment warehouse, is a warehouse located in close proximity to the customer. The goods and raw materials stored there are the property of the storing party until the customer removes them. Only when this happens does a so-called delivery take place as a legal transaction.
What are the advantages of a consignment warehouse?
A consignment warehouse offers several advantages for both the warehouse keeper and the buyer of the goods.
For the storer/seller:
- A long-term supply relationship is established between the storer and the buyer, allowing for long-term financial planning
- If a consignment warehouse is located on the customer's premises, storage costs do not apply
- The depositor is the owner of the goods until their removal and is thus protected from the buyer's insolvency.
For the customer/buyer:
- The customer can always dispose of the goods in the warehouse, which provides a high security of supply
- Without own warehouse, many fixed costs are eliminated
- Low capital commitment, since the material only has to be paid for after withdrawal
