Work out consignment stock value instantly with clear inputs, formula shown and shareable results.
Consignment stock sits on your site but remains the supplier's property until consumed, so you avoid the capital cost and much of the obsolescence risk. The holding cost avoided is the value of the arrangement, and it is usually reflected in a slightly higher unit price.
Stock value
Value = Consignment units x Unit cost
Holding cost avoided
Avoided = Stock value x Annual holding cost rate %
Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.
Usually you, under the consignment agreement, even though title has not passed. Insurance and stock accuracy obligations should be explicit.
Not if the supplier prices the funding into the unit price at a rate above your cost of capital. Compare the price premium with the holding cost avoided.