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Thanks everyone for such detailed answers! It was very helpful to me as a newbie in business.

The reason I choose consignment initially is because my products is new to the market where there is an established brands. I thought stores are only happy to have my products on shelves if they are not under pressure to pay upfront within 30 days. Plus, they would stock more in quantity if it is on consignment (e.g. they’d order 12 units of one product on consignment instead of 3 on a 30-day payment term)

Taking in your advices, I guess I will have to rethink my sales strategy because indeed, selling on consignment really affect my cash flow.

@ Matthew – Thank you for your opinion. Return and refund is indeed a good strategy. The reason I couldn’t do this is because my products are small and low price (in many cases, low quantity – one invoice is only about $50ish) , and transporting it affects profitability.

– I think you explained the general consignment procedure quite clearly with consignment note at the beginning and recording stock sold every month, then invoicing. Thank you.

– Thank you for pointing out the disadvantages of consignment, and for sharing your experience on wholesaling