This agreement decreases the exporter's risk because he remains the owner of the commodities in storage.
The distributor does not need to pay until he has sold the commodities, so he improves his cash flow.
The distributor's interest will be to increase the amount of the stock in consignment because this has no effect on his cash situation.
Therefore the parties should agree on reasonable stock rolling adapted to the market demand, and consider how quickly the exporter may produce and deliver additional goods in order to avoid stock disruption.
Due to the European VAT rules, it is easier to have a consignment stock between EU countries.