Consignment Items & Setting up Discounts
Reference Number: AA-00438 Views: 3413 Created: 2014-12-10 13:31 Last Updated: 2014-12-10 13:31 0 Rating/ Voters

This article is designed to explain how the different options for the Consignment Discount Model work and what the end result of these discounts are.

The Consignment Discount Model can be found in the Vendor Record under More Info...

NOTE - The Discount Model that is in place when an item is sold is what will be used to calculate the consignors share. This means that you can change the Discount Model during special events and change it back when the event is over. 

Discounts Come From Store's Share - In this case all discounts are taken from the stores share of the sale price. The vendor will receive their percentage from the original retail price before the discount.

Discounts Shared With Consignor - In this case the consignor will receive their percentage of the price the item sold for after the discount.

Let's take a closer look at the numbers for the Shared Discount case:
Normal Retail Price: 24.00
10% discount: -2.40
Discounted Price to customer: 21.60
60% payout at full retail price: 14.40
60% of discounted price: 12.96
Payout reduced by: 14.40 - 12.96 = 1.44 = 60% of 2.40
Store's share of discount: 2.40 - 1.44 = 0.96 = 40% of 2.40

So, the cost of the discount is split between the vendor and the store by exactly the same 60/40 split that the sale amount would normally be split. They are each covering a portion of the discount directly proportional to their portion of the revenue. If the discount was split 50/50 the store would be taking a larger hit proportionally to their share of the sale.

Note that these numbers also mean that each party is getting 10% off of their normal share:
Vendor's share: 14.40 - 10% = 12.96
Store's share: 9.60 - 10% = 8.64
Discounted price to customer = 12.96 + 8.64 = 21.60

Other Types of Discounts
There may be different ways you discount for different types of customers, for example vendor to vendor sales where the vendor will take the entire discount. Or possibly the store offers a special discount to a family member. This would not be easy to do if you had to change the discount model in the vendor record for each different type of sale. You can do this by setting up specific items for this type of discounting.

NOTE - There are very rare occasions that this has to be used. We have found that it is mostly in the consignment mall situation. Most stores pick one way and don't change it except for special event sales.

Entire Discount comes from Vendor - Create an item record for discounts for each vendor when the discount is being taken out of the Vendors share. Note that the Vendor Code is for Bill R. and the Pricing Model is Consignment Using Specific Split of 100% and no inventory tracking.
This item will be used when the discount comes out of the Vendors share and not the Stores Share. When you enter this item into the cash register screen you will type the dollar amount of the discount into the discount field for the discount item for that vendor.

Entire Discount comes from Store - The only difference will be that the Consignment Using Specific Split will be 0%.










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