What is a customer consignment warehouse?
In a customer consignment warehouse, the supplier of a company stores the goods and parts produced for it. This warehouse is usually very close to the buyer.
The supplier shall remain the owner of the stored goods until the customer removes them from the warehouse. In this case, the supplier is referred to as the consignor and the customer as the consignee.
What are the advantages and disadvantages of a customer consignment warehouse?
For companies, such a warehouse has both advantages and disadvantages.
Advantages:
- Only a limited investment risk
- Hardly any capital tied up
- No own warehouse required
- Goods and parts are directly available
Disadvantages:
- Supplier can change prices at will
- Not comparing prices can result in higher costs
The supplier also has both advantages and disadvantages. For example, they can benefit from a high level of customer loyalty and cooperation with their own customers is improved. On the other hand, a high level of investment is also required to set up your own warehouse.
