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Franchising and Stock in consigment doubts

Former Member
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Hi gurus,

we successfully implemented an IS-Retail solution for one of our customers some years ago.

We are now collaborating with the same client in a new project : they have a new company in Arabia and they are going to work in "Franchising". We were thinking of using a Dummy company code for this Franchised center. Apparently we shouldn't have any problems because they are not going to manage Inventory/Stocks there, nor contability. It is a simply dummy company code which receives stock (stock would be managed centrally), as well as invoicing for AR.

We were thinking of using a specific Z sale flow's for it, separated from the "not franchising" ones. Apparently right, we would have to make some developments and we would maintain the stock in consignment. Yesterday, they proposed us a new contract form, they said it is normally used for franchising and is called "Buy back contract". This contract states that the company which delivers the goods can post a sale invoice (and its FI documents) instead than a "Proforma Invoice" related to the delivery as it is suppose to be for Stock in consignment. The contract also clearly defines that all the goods which are not sold have to be "buy back" from the company.

As long as the retailers sales goods, SAP closes the open items related to the Sale Invoice. It looks like a direct sale, but then when they are obliged to buy back the unsold goods, somehow, becomes a stock in consignment.

My question is: is it technically possible to mantain a stock in consignment although a sale invoice is created? and be legal (thinking of auditoria) at the same time? Does exist a way to work around this "strange" requirments? I know it might looks weird, but they say others competitors do like this...

thanks

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
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Hi

Your model is based on VEndor Managed Inventory. Here you are trying to pass on the complete risk of non saleable stock to company and not the retailer. According to me this is not correct. Because there will be no pressure and motivation for retailer to get rid of stock.

According to me you can define a process where in both share the cost of carrying the goods if not sold.

Now coming to technical feasibility. It is totally possible.

1. Define a retail store as a customer.

2. Use consignment issue.

3. This will have stock at retailer at consigned to retailer.

4. If there is return then you can define a condition pricing on consignment return so that there is cost attached for not selling by retailer.

Reward if helpful

KInd Regards

Sandeep

Answers (0)