Why don’t the owners of the goods sell the products instead of the consignment method?

[Starmix]

There are several reasons why an owner of goods might choose consignment over direct selling. The reasons could be the following:

• Market access without infrastructure;
• Reduced upfront costs and risks;
• Testing the market;
• Leverage retail experience, and
• Cash flow considerations.

Consignment allows goods owners to reach markets or retailers they might not have direct access to, without investing in stores, sales staff, or distribution channels. Instead of investing in marketing, stocking, and selling, consignors can place products with established sellers who handle those aspects, reducing financial and operational risks.

Consignment enables owners to test new products or enter new markets without committing to large production or sales efforts. Also, unsold goods can often be returned. Consignees are usually experienced sellers with established customer bases. They know how to promote and position [products effectively, increasing potential sales. Although payment occurs after sales, consignment can ease cash flow pressures by avoiding the need to finance full inventory production or complex distribution.

In short, consignment is a strategic choice that balances opportunity and risk, helping goods owners expand reach and sales without heavy upfront commitments.

 

[Suba]

There are many advantages for consignors, such as eliminating store rental costs and promotional expenses, expanding market reach, and increasing customer base. Therefore, the consignment system allows owners to avoid having to sell goods directly.

 

[Starmix]

This method eases owner of the goods, but if his goods aren't what people need they will be returned if the expiration date is near.