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PR Newswire
03-08-2022, 01:48 PM
"Company recognizes revenue, not when products are delivered to its MINISO Retail Partners, but only when products are sold by its MINISO Retail Partners to end-customers" - This is known as consignment sales.
Consignment Sales
The consignors deliver the products to the consignees - the stock is known as consignment inventory. Revenue is only recognised upon the eventual sales to endcustomer by the consignees.
Textbook definition is that the consignee will earn a commission upon the eventual sales. But in reality, there are numerous way consignment may be recorded. The consignee may booked a sales of the product, at the same time, a purchase upon the eventual sales to the endcustomer. Technically, the risk of the inventory remains with the consignor, but may be discharge to the consignee via well defined business agreements (risk such as proper storage/theft/expiry).
The business owner (consignor) may consign its inventory (said books/magazines/medicines) to its customer A (consignee) which own 10 stores. He will maintain a record to capture all deliveries and billings to that single customer A. He may choose to keep track of the consignment inventory at each of these 10 stores of customer A, or simply oblige the customer to periodically report the consolidated inventory for bill purposes (may be multiple invoices or just a single invoice). It depends on how is the business agreement are signed.
Consignment sales (local or overseas) are quite common, especially if the owner wish to reach a much wider pool of end-customers.
Consignment Sales
The consignors deliver the products to the consignees - the stock is known as consignment inventory. Revenue is only recognised upon the eventual sales to endcustomer by the consignees.
Textbook definition is that the consignee will earn a commission upon the eventual sales. But in reality, there are numerous way consignment may be recorded. The consignee may booked a sales of the product, at the same time, a purchase upon the eventual sales to the endcustomer. Technically, the risk of the inventory remains with the consignor, but may be discharge to the consignee via well defined business agreements (risk such as proper storage/theft/expiry).
The business owner (consignor) may consign its inventory (said books/magazines/medicines) to its customer A (consignee) which own 10 stores. He will maintain a record to capture all deliveries and billings to that single customer A. He may choose to keep track of the consignment inventory at each of these 10 stores of customer A, or simply oblige the customer to periodically report the consolidated inventory for bill purposes (may be multiple invoices or just a single invoice). It depends on how is the business agreement are signed.
Consignment sales (local or overseas) are quite common, especially if the owner wish to reach a much wider pool of end-customers.