Consignment vs. distributor-buy: where the risk actually sits
Both models get your product onto a foreign shelf. Only one of them moves the capital risk off your balance sheet.
On paper the two models look similar: a partner sells your product in a market you can't reach yourself. The difference is one line in the contract — who owns the inventory while it waits to sell.
Consignment: you still own the risk
Under consignment, you ship product and keep it on your books until it sells. You've paid to manufacture it, paid to ship it, and now you wait — collecting a slice at a time, only as units move, with slow-moving SKUs sitting in someone else's warehouse as your capital.
Distributor-buy: the risk changes hands
Under a distributor-buy model, the partner purchases the inventory outright. You're paid on the purchase order, not on sell-through. From that moment the incentive is fully aligned: whoever holds the inventory is the one motivated to price it, advertise it, and move it.
"Consignment lends your product to a market. Distributor-buy sells it to one — and takes the risk that comes with it."
Neither model is dishonest. But if your goal is to free up cash and hand the downside to someone who's equipped to manage it, only one of them actually does that. That's the model we built SeelamGlobal on.