If you’re looking for ways to reduce your inventory carrying risk, consignment inventory is not the solution and any costs saved are usually not worth the added pressure of keeping track.Here are a few ways to ensure that consignment inventory is beneficial for everyone involved:Under SOR sales, the supplier will transfer his inventory to the retailer and will get paid only when these goods get sold. You can now read the complete guide and we'll keep you informed about more awesome guides in the future.Learn deep insights about selling more and growing your business.Our team will contact you to get started on Primaseller within 24 hours. All rights reserved. This year alone, we’ve seen the sales of one of our distributors suffer a 33% loss due to the required switch to the consignment model. In our experience, we’ve seen profits squeezed for distributors under this model. Avoid inventory carrying costs. This means that the distributor must have an inventory management solution in place to track the inventory that is consigned at each storefront. Consignment is used as a strategy to convince a retailer to carry products that may have otherwise not been carried. With so much capital tied-up in inventory, it’s not surprising that businesses devote a lot of time and expertise to improving and perfecting their inventory management processes. Since the retailer does not invest up front for the product, he/she makes a risk free profit when the product sells and does not lose money if the product doesn’t sell. How to Manage Consignment Sales. Benefits of Consignment Stock First, the primary benefit that can be derived from a consignment agreement is that it allows the consignee to save money on inventory costs. You pay the consignor only after you have sold the merchandise. This increases the probability that a new product will be accepted and presented to the retailer’s end consumers.Even though the retailer has approved the placement of the product in their storefront, the distributor is responsible for the inventory. As a result, you don’t have to worry about raising requests on time.There’s no denying the fact that consignment inventory handling involves a certain amount of risk.