When Stores Pull Products: Why It’s More Than Just a Statement
Do Tariffs and Product Pulls Really Have an Impact?
Lately, there’s been a lot of chatter about tariffs, trade wars, and the ripple effects they have on our everyday lives. Many people assume that when a store pulls products from its shelves, whether in protest or due to supply chain disruptions, it doesn’t really matter. The common belief is that the products are already paid for, so taking them down is just a visual statement. But in reality, the impact runs deeper, especially when those products are on consignment. This article will help set the record straight.
What Is Consignment, Anyway?
Consignment is a bit like borrowing a book from a friend instead of buying it. In retail, it means stores display and sell products without purchasing them upfront. Instead, the supplier (or consignor) retains ownership until the product is sold. The store (or consignee) only pays for the product once it moves off the shelf. If it doesn’t sell, it can often be returned to the supplier, which minimizes risk for the retailer.
This model is more common than you might think. The Liquor Control Board of Ontario (LCBO), for example, uses consignment for some of its wine products. Through their consignment wine program, importers and agents can bring in wines without the upfront cost, allowing the LCBO to offer a wider selection of international wines without the risk of unsold inventory.
Who Else Sells on Consignment?
Consignment isn’t just a strategy for niche or small retailers. The Hudson’s Bay Company has been known to use consignment arrangements for certain high-end and specialty products. The second-hand and vintage clothing scene thrives on consignment too, with shops like Turnabout in Vancouver and Common Sort in Toronto taking the model mainstream.
In the U.S., big names like Nordstrom have dipped into consignment through their “See You Tomorrow” resale shop.
The Real-World Impact of Empty Shelves
When a store pulls consignment goods, the consequences hit the supplier directly. Unlike traditional retail models where a store might take a hit on unsold inventory, in consignment, it’s the supplier who feels the sting of lost sales and missed exposure. For smaller brands, losing shelf space can mean a big financial blow, especially if they rely heavily on consignment partnerships.
Next time you see a product pulled from the shelves, it’s worth thinking about who is really paying the price. More often than not, it’s not the retailer, it’s the people behind the products, navigating the complex and often unpredictable world of consignment sales.
