My guess is that there’s rarely any capital at risk with regard to getting what a dealer has IN a stock item OUT of it, so I’m not sure what the purpose of a consignment would actually be except to entice undercapitalized dealers to carry lines they shouldn’t. To keep the doors open dealers have to find something to sell that they can make a decent profit on so when a dealer goes belly up the causes are usually complicated and rarely have much to do with not being to get cleanly out of particular purchases of demo items. Manufacturers are sometimes MORE on the hook because bad accounts go bad gradually, then THEY are the ones who can't get back their money from a bankrupt dealer.
Have you ever wondered why speaker manufactures do not consign speakers to dealers?
How many of you have wanted to hear a pair of speakers and the dealer only has a pair of their low end speakers to listen to? I would say in most cases, dealers in Colorado have limited availability of speakers to listen to on their floor. How then is it possible to purchase a speaker without listening to it first? You would think speaker manufactures would want to sell their higher end speakers and consign at least three speaker models to dealers so they could have them available for their customers to listen to.