Home Forums Logistics Current wholesale supplier now offering consignment

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  • #993322
    EJM07
    Member
    • Total posts: 1

    Hello all – I’m looking for some advice. I run an online swimwear store and have been dealing with a supplier for 3 years now – all is great, no issues. This supplier is based in the U.S. so their seasons are back to front with ours i.e their winter is our summer.

    So we have been purchasing a small selection wholesale each year and selling it in Australia. As a small business we can’t stock their full range due to cashflow and we purchase their stock in U.S dollars and with our declining exchange rate money doesn’t go as far. They have approached me to expand their line in our store by adding a consignment range. I will still have some styles I have purchased wholesale in the mix.

    I am guessing their logic behind this is that they are now coming into winter and have a stock pile of certain styles that haven’t sold – hence they are now offering them to me as consignment as we are only now coming into our summer. I’m willing to give this a try for one season (6 months) however I am not sure what to suggest to them in terms of consignment rates. Typically consignment is a % of the sale price. This gets tricky in that we sell in AUD and they wholesale in USD. As they are trying to clear stock do you think they would agree to being paid wholesale rates when the items are sold or am I being cheeky?

    #1191003
    bb1
    Participant
    • Total posts: 4,485

    Not sure about the answer to your question, I’m sure one of the guru’s will know that, but the other thing you need to consider is shipping costs, etc, if items don’t sell, are they shipping them back home, or are you. So don’t just look at the margin on the items, but also the other things that would be reasonably clear cut if you were purchasing the stock outright, but may be different in a consignment situation

    #1191004
    Anonymous
    Guest
    • Total posts: 11,465

    Hi EJM07, and welcome,

    Sorry that I’m not the right person to answer your question, but maybe some of the accounting experts here can help you frame an agreement to offer your supplier.

    In the meantime, welcome to Flying Solo, and thanks for joining us,
    Jayne

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