What is a customer consignment warehouse?
In a customer consignment warehouse, a company's supplier stores its goods and parts produced for it. This warehouse is usually located very close to the buyer.
The supplier is 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 needed
- Goods and parts are directly available
Disadvantages:
- Supplier can change prices at will
- Higher costs may be incurred by not comparing prices
The supplier also has both advantages and disadvantages. For example, he can benefit from a high level of customer loyalty and cooperation with his own customer is improved. On the other hand, a high level of investment is also required for the establishment of a dedicated warehouse.
