Sale or Return (SoR)
What Is Sale or Return (SoR)?
Sale or Return, often shortened to SoR, is a stock agreement where a retailer only pays the supplier for goods that are sold.
Unsold inventory can be returned to the supplier after an agreed period.
In essence, SoR shifts inventory risk away from the retailer and back to the brand or supplier, making it easier for retailers to carry broader assortments with lower upfront commitment.
Why Sale or Return Matters for Brands
For fashion brands and retailers, SoR can be a powerful growth lever, but it also introduces financial and operational considerations.
It is commonly used when testing new products, categories, or retail partnerships.
Key benefits:
Lower risk for retailers when onboarding new brands or styles
Faster market entry for emerging or experimental collections
Wider assortment availability without full buy-in commitments
Key risks:
Higher inventory risk for brands and suppliers
Complex tracking of sold versus unsold units
Potential delays in revenue recognition
Examples of Sale or Return in Action
Imagine a fashion brand entering a new retail chain.
Under a SoR agreement, they can:
Place a curated assortment in select stores
Allow the retailer to pay only for items that sell
Collect unsold stock at the end of the agreed period
Use sales data to inform future assortment and pricing decisions
SoR enables brands to validate demand before committing to large wholesale orders.
How Sale or Return Fits into the Ecosystem
Sale or Return often connects with:
Consignment Models: To define ownership and liability for unsold stock
Assortment Planning: To decide which products are suitable for SoR agreements
Markdown Optimization: To manage pricing strategies before returns occur
Together, these systems help brands balance growth opportunities with inventory and margin control.
Related Terms
Consignment
Assortment Planning
Markdown Optimization
Inventory Risk
