Consignment warehouse

A consignment warehouse is a supplier's warehouse that is located on or in the immediate vicinity of a customer's premises. The stored parts and products remain in the supplier's possession until they are removed from the consignment warehouse by the customer.

What is a consignment warehouse?

The operator of a consignment warehouse, i.e. the supplier of the goods, is referred to as the consignant, and his customer as the consignor. Goods from a consignment warehouse are intended by a supplier for a specific customer, but remain in his possession until the customer actually removes the goods from the warehouse. As soon as this happens, a delivery takes place for which sales tax is due in Germany in accordance with § 3 UStG.
The goods become the property of the customer. From a customs point of view, a consignment warehouse is a bonded warehouse. If the goods are imported from a third country, customs duties are only due when the goods are removed from the consignment warehouse by the customer.

Advantages of a consignment warehouse for the customer

With a consignment warehouse, the customer benefits from short delivery times. The required goods and parts are always in stock for him. He also reduces his capital commitment, as he does not have to run his own warehouse. The supplier is responsible for quality assurance and must ensure that the goods do not exceed a possibly existing expiry date. This results in a high level of security of supply and a reduced investment risk for the customer.

Advantages of a consignment warehouse for the supplier

With a consignment warehouse, the supplier can build a strong and long-term relationship with his customer. In future, he will only obtain the required goods and parts from the consignment warehouse of the supplier. If the consignment warehouse is located on the customer's premises, the storage costs for the supplier are usually very low or completely eliminated.

Summary

- a consignment warehouse is operated by a supplier close to a customer
- The supplier is the owner of the goods in a consignment warehouse
- When goods are removed from the consignment warehouse, a delivery takes place that makes the customer the owner
- the customer benefits from short delivery times, lower capital commitment and reduced investment risk
- The supplier benefits from high and long-term customer loyalty and low storage costs

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