The Warehouse LoopholeEurope Forgotto Close

Before January 2020, a German manufacturer wanting to store products in a Polish warehouse faced immediate VAT registration requirements—even if the goods might sit unsold for months. Each member state had different rules. Compliance was expensive and unpredictable. The EU's Council Directive 2018/1910, implemented as part of the 'Quick Fixes' package on 1 January 2020, changed this. Under the new call-off stock procedure, an EU supplier can ship goods to a Polish warehouse designated for a single, identified, VAT-registered buyer. As long as the buyer actually takes the goods within twelve months, the supplier never registers for Polish VAT. The tax obligation transfers at the moment of 'call-off'—when the buyer claims the inventory. The requirements are specific: a written agreement naming the buyer, a register tracking movements, and a twelve-month window. Stock intended for multiple customers, or non-EU imports, still trigger immediate registration. But for the common scenario of a manufacturer pre-positioning inventory for a known distributor, the administrative burden dropped substantially. Poland implemented the rules on schedule. For vendors testing Polish demand before committing to local infrastructure, this removed a meaningful barrier. For established distributors, it converted consignment from a complex tax negotiation into a standardised process.

A warehouse in Wrocław holds 3,000 laptops for a Taiwanese PC manufacturer. The physical storage is the least valuable part of the service. The distributor operating the facility offers credit terms that let resellers order without upfront payment. It maintains a technical team that configures machines before shipment—installing software, applying corporate images, testing components. It runs a returns operation that refurbishes products and manages warranty claims, so the manufacturer never deals with Polish end-customers directly. When a reseller's customer calls with a problem, the distributor's support line answers. These services explain why value-added distributors command margins that pure logistics companies cannot. One major European VAD advertises financing programmes aligned to reseller cash cycles. Another operates a lifecycle services hub handling repair, refurbishment, and IT asset disposal. The integration goes deeper than service catalogues suggest. Modern VAD platforms connect via API to reseller ERP systems, feeding real-time stock visibility and automating call-off triggers when inventory falls below thresholds. The manufacturer sees demand signals before placing production orders. The reseller sees available stock before quoting customers. The end buyer receives next-day delivery without knowing that three organisations coordinated behind the scenes. This is what separates warehousing from distribution.

Not all distributors offer the same services, and the mismatch between product type and distributor capability explains most consignment failures in Poland. The first type specialises in technology. These distributors—ScanSource is a well-known example—combine manufacturer financing with reverse logistics and technical services. Their gross margins run around 18% because they bundle credit insurance, warranty processing, and refurbishment into the relationship. They make sense for high-value electronics where per-unit margins justify the comprehensive handling. The second type specialises in logistics. Companies like Raben Group optimise for warehouse density and last-mile delivery rather than technical services. Their margins run 12-14%, lower than technology specialists but sustainable through volume. They suit high-turnover, commodity-adjacent products where speed matters more than configuration. The third type specialises in finance. These distributors accept thinner margins—8-10%—in exchange for offering credit terms that resource-constrained resellers cannot obtain elsewhere. They succeed with emerging brands that lack the cash flow to wait for customer payments. The structural lesson is that distributor selection is a category decision, not just a vendor decision. A manufacturer sending enterprise servers to a logistics-focused VAD will be disappointed. A consumer electronics brand paying technology-specialist margins for commodity products will bleed money. The fit matters more than the relationship.

Consider two manufacturers entering Poland with identical products and similar revenue targets. The first takes the traditional path: it leases warehouse space, hires local staff, registers for VAT, and purchases €600,000 of inventory to stock the facility. Working capital is locked up immediately. Revenue trickles in over months. Breakeven arrives somewhere around month eighteen, assuming nothing goes wrong. The second manufacturer partners with a VAD under a consignment arrangement. The distributor holds the inventory. VAT registration is deferred under the call-off rules. The manufacturer's Polish footprint requires perhaps €70,000 in operational setup. Breakeven arrives around month six. The difference is not marginal. Working capital tied in inventory typically runs 25-30% of annual revenue in technology distribution. For a manufacturer targeting €500,000 in Polish sales, consignment releases more than €150,000 that would otherwise sit on pallets. That capital can fund sales headcount, marketing programmes, or expansion into adjacent markets. The trade-off is control. Consignment means trusting a partner with customer relationships and service delivery. For manufacturers with strong brands and clear channel policies, this trade-off usually favours speed. For those still establishing product-market fit, the distributed model can obscure demand signals that direct ownership would reveal.

Poland's e-commerce market reached $36.4 billion in 2024, according to Ecommerce News EU. Not all of that volume suits consignment distribution—fashion and grocery have different logistics requirements—but technology products, consumer electronics, and appliances represent a substantial addressable segment. Industry estimates suggest roughly 45% of Polish e-commerce, or $10-12 billion, flows through categories where consignment makes structural sense. Current penetration sits around $1-1.5 billion, perhaps 10-15% of the addressable market. The gap is not demand. Polish resellers want inventory access without cash outlays. Polish consumers expect next-day delivery. The constraint is capacity: VAD capacity to onboard brands, integrate systems, and manage credit risk across a fragmented buyer base. Three developments are loosening this constraint. Warehouse construction continued through 2024, adding 2.6 million square metres to Poland's logistics stock. API-driven integrations have reduced onboarding timelines from months to weeks. Credit insurers like Atradius and Euler Hermes have expanded Polish coverage, making it easier for VADs to extend terms without absorbing all the risk themselves. If consignment penetration reaches 30% of addressable volume by 2027—a level consistent with mature Western European markets—Poland's consignment market would grow to $3-3.6 billion. That expansion would benefit the VADs capable of combining finance, logistics, and data infrastructure at scale.

Poland is not a logistics superpower. The World Bank's 2023 Logistics Performance Index ranks it 26th globally, with a 3.6 out of 5.0 score—behind Germany's 4.1 but ahead of neighbouring Czech Republic, Slovakia, and Hungary. This is good enough. Consignment does not require world-class infrastructure. It requires predictable infrastructure: warehouses that can promise two-week replenishment cycles and deliver them 95% of the time. Poland meets this threshold. The country added 2.6 million square metres of industrial and logistics space in 2024, according to AXI IMMO and CBRE reporting. Total warehouse stock exceeded 35.3 million square metres by early 2025. Vacancy rates sit around 7.5%, ensuring availability without the pricing pressure that would accompany tighter supply. Modern facilities cluster around Warsaw, Wrocław, and Upper Silesia—Poland's manufacturing heartland. These locations shorten delivery windows to major population centres while maintaining highway access to Germany, the Czech Republic, and the Baltics. Investment continued despite broader economic uncertainty: €1.26 billion flowed into Polish logistics real estate in 2024, up 27% from the prior year. The practical implication is that VADs can commit to service levels that let Polish resellers bid on projects they would otherwise decline due to stock risk. The infrastructure exists. The demand is proven. The missing piece—working capital discipline—is exactly what consignment provides.

Consignment does not eliminate risk. It redistributes it in ways that matter to understand before signing agreements. The manufacturer retains title until call-off. This means inventory obsolescence, technology transitions, and demand shortfalls remain the manufacturer's problem. Product sitting unsold for nine months in a Polish warehouse is still the manufacturer's loss, even though the VAD handles storage. The reseller gains access without advance payment, but performance risk crystallises the moment inventory is called off. In Poland's B2B environment, where Atradius reports that overdue invoices now account for nearly 40% of B2B transactions with bad debts affecting 2-3% of invoices, reseller credit quality determines whether consignment creates value or losses. VADs manage this through layers of protection: credit insurance from Atradius and Euler Hermes, strict onboarding based on reseller credit scores, days-sales-outstanding monitoring that flags aging accounts before write-offs occur. Well-designed consignment agreements cap aging exposure through 30-90 day call-off windows, align inventory positioning with actual sell-through data, and mandate weekly demand reviews. Case studies from Envista Corporation show consignment can improve inventory turns by up to 60% compared to traditional models. But that improvement assumes the agreements are structured properly. The risk does not disappear. It gets managed, or it gets expensive.

The regulatory foundation comes first. Identify a single, VAT-registered buyer for the call-off arrangement. Draft a written agreement specifying the buyer, the goods, and the twelve-month window. Establish a register tracking every movement—when goods enter the warehouse, when they leave, who took them. This documentation is not optional under EU rules. Warehouse location matters more than warehouse size. Facilities near Warsaw, Wrocław, or Upper Silesia shorten delivery windows to major population centres. Proximity to highways feeding Germany and the Czech Republic enables regional expansion later. The technology layer connects the pieces. Warehouse management systems feeding daily stock visibility to the manufacturer. ERP integration enabling automated call-off triggers when inventory falls below thresholds. These connections convert passive storage into active market intelligence. Operational discipline prevents the arrangement from becoming an expensive storage lease. Target call-off within 30-90 days of arrival. Conduct weekly demand reviews with the reseller. Align payment terms so cash collection begins when title transfers—not when products ship. For non-EU imports, plan for customs and VAT at the border; bonded warehouse arrangements can defer duty until call-off but add complexity. Start narrow. Test the model on high-turnover items with predictable demand before expanding to slower-moving or higher-value inventory. Measure stock aging, call-off velocity, and days sales outstanding weekly. In a well-structured programme, this data reveals demand patterns before the manufacturer's own forecasts do.