Consignment vs Wholesale: Which Distribution Model Fits Your Brand?

The Distribution Decision Every Brand Owner Faces

You've got a product that's selling well online. You know wholesale is the next step. But how do you get there without risking your entire inventory budget?

The answer depends on which distribution model you choose.

Traditional Wholesale (Buy-Sell)

In a traditional wholesale arrangement:

• The distributor buys your stock upfront at wholesale prices
• They take ownership and sell it to retailers
• You get paid when they buy from you

Pros:

• Immediate cash flow from bulk orders
• Risk transfers to the distributor once they buy
• Predictable revenue if they reorder regularly

Cons:

• Large minimum order quantities (MOQs) — often 100+ units per SKU
• Distributors are selective — they only take proven sellers
• If the distributor can't sell your stock, they may demand returns or credits
• Harder for emerging brands to get accepted

Consignment Model

In a consignment arrangement:

• You provide stock, but you retain ownership
• The distributor sells your products to their network
• You get paid monthly for what actually sells
• Unsold stock remains yours

Pros:

• Zero stock risk — you never lose product to a failed distribution deal
• Low barrier to entry — start with as few as 6 units per SKU
• Distributors are more willing to take on new/unproven brands
• You keep control of your inventory

Cons:

• Slower cash flow — you get paid as products sell, not upfront
• You carry the stock cost until it sells
• Requires trust in the distributor's sales ability

Which Model Is Right for You?

Choose traditional wholesale if:

• Your brand is established with proven retail demand
• You have the capital to produce large batches
• You need immediate cash flow from wholesale orders

Choose consignment if:

• You're an emerging brand testing the wholesale market
• You want to minimize financial risk
• You'd rather prove demand before committing to large production runs
• You're bootstrapped and can't afford MOQs of 100+ units

The Brand Connections Approach

We use a consignment model because we believe great products deserve a chance, regardless of how established the brand is. You send us stock (starting at just 6 units per SKU), we sell it to our network of 500+ retailers and growing ABN holder database, and you get paid monthly.

No bulk orders. No stock risk. Just results.

Check if your brand is a fit — our AI assistant Alex can calculate your margins in under 3 minutes.