Parts Consignment Agreement
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This document will serve as an agreement between (DEALER NAME) and (CUSTOMER NAME) permitting a consignment inventory to be placed at the following location: (CUSTOMER NAME AND COMPLETE ADDRESS). Heretofore, (Dealer Name) will be referred to as Vendor and (Customer Name) will be referred to as the Customer.
The overall purpose of this program is to provide the following customer advantages:
- Immediate availability thereby reducing downtime
- Reduced freight cost
- No inventory ownership cost
- Reduced / Eliminated inventory write offs when equipment models change
- Parts are not paid for until they are installed
Both parties agree upon the following points:
- Customer will supply a secure area to house consignment inventory with adequate insurance covering damages, fire, etc.
- Initial part numbers covered by consignment to be determined by both vendor and customer
- Vendor and customer will agree upon stocking levels of each part number. Once the consignment is in place, the vendor will supply a total inventory list to the customer
- A vendor representative and a representative of the customer will inventory the consignment on a monthly basis
- A vendor representative and a representative of the customer will jointly replenish the shelves of consignment inventory and the customer will be billed accordingly for each part number that falls below consignment on hand quantity.
- It will be the responsibility of the vendor to maintain agreed upon stock levels
- In the event that stocking levels for any part in the consignment inventory should fall to zero before the scheduled inventory, it is the customer’s responsibility to notify the vendor if needed.
- Customer and vendor can mutually, at any time request additional part numbers to be added to or deleted from the consignment inventory in accordance to the aforementioned guidelines.
- This agreement can be terminated by either party with a written 30 day notice
- Vendor reserves the right to remove consignment inventory should the account become delinquent
- Either the customer or the vendor can terminate this agreement. The customer will be liable only for the parts consumed; the entire inventory is to be returned to the vendor in the original packaging and in resalable condition. An option to purchase remaining inventory at existing prices will be offered to the customer.
- The vendor and customer shall mutually agree upon any parts substitutions.
Customer and vendor agree on the terms of this document on: