Consignment

Consignment lets you sell items that belong to a vendor (the "consignor") without purchasing them upfront. The vendor retains ownership until the item sells, and you pay them a portion of the sale price. VMX tracks consignment items separately from your owned inventory so they don't affect your COGS, inventory valuation, or shrinkage numbers.

When to Use Consignment

Local artisan goods — jewelry, pottery, candles, artwork from local makers
Seasonal trial items — vendor lets you try a product line with no upfront cost
Nursery stock on consignment — grower retains ownership until plant sells
Any item where you don't pay the vendor until after the sale

How It Works

You create items marked as Consignment and assign a Preferred Vendor (the consignor)
You receive consignment stock — it appears in inventory but is excluded from your inventory asset value
When a consignment item sells, VMX records the sale and calculates the cost owed to the vendor
The Consignment Report shows what was sold, grouped by vendor, so you know what to pay each consignor
Consignment items are automatically excluded from COGS, inventory variance, and rewards programs

Setting Up a Consignment Item

Creating the Item

When creating a new item, select Consignment as the Item Type:

Item Type	When to Use
Regular	Normal purchased inventory
BOM	Bill of Materials (assemblies)
Consignment	Vendor-owned, sold on their behalf

Once created, the item is stored as a regular item with a consignment flag. A blue banner on the item page will read: "This item is sold under consignment."

Note

The consignment flag cannot be removed from the item page UI after creation. If you need to convert a consignment item to regular inventory, contact support.

Assigning a Vendor (Required)

Every consignment item must have a Preferred Vendor — this is the consignor who gets paid when the item sells.

On the item detail page, select the vendor from the Preferred Vendor dropdown
Save the item

Warning

Changing the vendor on a consignment item retroactively changes who is owed for all past and future sales. VMX will ask you to confirm before making this change.

Setting the Cost (Fixed Cost %)

Consignment items typically don't have a fixed purchase cost — instead, the cost is calculated as a percentage of the selling price. This is the Fixed Cost % field on the item detail page.

Example: A local artist provides pottery on consignment. You agree to pay them 60% of whatever the item sells for. Set Fixed Cost % to 60.

If the item sells for $50.00, VMX records the cost as $30.00 (60% of $50)
If you discount it to $40.00, the cost becomes $24.00 (60% of $40)

This dynamic cost calculation happens automatically at the register — no manual entry needed.

Note

Fixed Cost % can only be set on consignment items that have an average cost of $0. If the item already has a non-zero cost (from receiving), you'll need to clear it first.

Alternative: Fixed Cost per Unit

If your consignment agreement is a flat dollar amount per unit rather than a percentage, simply set the item's average cost to that amount and leave Fixed Cost % blank. The cost will remain fixed regardless of selling price.

Receiving Consignment Stock

Receive consignment items through purchase orders just like regular items:

Create a PO to the consignor (vendor)
Add the consignment items and quantities
Receive the PO

The items will appear in your inventory with the correct on-hand quantities. The key difference is that this inventory is not included in your inventory asset value — it belongs to the vendor until sold.

Selling Consignment Items

Consignment items are sold at the register exactly like regular items — there's nothing different for the cashier. The only behind-the-scenes difference is how cost and accounting are handled:

Cost is calculated dynamically using Fixed Cost % (if set), or uses the item's average cost
COGS is not affected — the sale generates a consignment payable, not a cost-of-goods entry
Rewards points are not earned on consignment item purchases (system-wide)

The Consignment Report

Navigate to Reports > Inventory > Consignment to see a summary of consignment activity.

Sold/Returned

The top section shows all consignment items sold or returned in the selected date range, grouped by vendor with subtotals:

Column	Description
PLU	Item number (links to item page)
Description	Item name and size
Sold Qty	Quantity sold in the period
Total Price	Total retail revenue
Avg Margin %	Average margin on sales
Total Cost	Total cost owed to vendor

Use the date range at the top to filter to a specific period — this is what you'd use to calculate vendor payments (e.g., "What do we owe each consignor for March?").

On Hand Now

The bottom section shows all consignment items currently in stock:

Column	Description
Vendor	The consignor
PLU	Item number (links to item page)
Description	Item name and size
On Hand	Current stock quantity
Price	Retail price
Cost/Margin	Shows either the fixed cost % (in italics) or the average cost per unit

Finding Consignment Items

Use the Consignment filter on the Inventory Search page to quickly find all consignment items:

Go to Inventory > Search
Click the filter dropdown
Check Consignment
Click Search

This shows only consignment items, with an expanded result limit (up to 5,000 items).

Accounting Treatment

VMX handles consignment accounting automatically:

Account	Consignment Items	Regular Items
Inventory Asset	Excluded	Included
COGS	Excluded	Included
Inventory Variance	Excluded	Included
Shrinkage	Excluded	Included
Sales Revenue	Included	Included

On the Daily Accounting Report (QB Report), consignment sales appear in a separate section: "Daily Cost of Consignment Sold (by Vendor)" — showing the total cost owed per vendor for that day. This keeps consignment payables visible without mixing them into your regular COGS.

QuickBooks / Accounting Software

Work with your accountant to set up appropriate accounts for:

Cost of Consignment Sold — tracks what you owe vendors from consignment sales
Consignment Liability — the payable balance owed to consignors

These map separately from your regular COGS and Inventory accounts, keeping your financial statements clean.

Tips

Run the Consignment Report monthly (or per your vendor agreements) to calculate payments owed
Use Fixed Cost % when the vendor gets a percentage of the sale — this automatically adjusts if you discount the item
Use a fixed average cost when the vendor gets a flat amount per unit regardless of selling price
Group consignment items by vendor using the report's vendor grouping to make payment processing easier
Receiving a PO is still the right way to add consignment stock — it creates the proper inventory trail even though you're not "buying" the items