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Definition: Consignment

Consignment means the act of delivering goods where a specific shipment of good is send by a party called the consignor to the receiving party called consignee. It should be noted here that the consignor and the consignee do not share the relationship that of a buyer and a seller.

The ownership of the goods remains with the sender. Transfer of goods may be done for an auction, for sale in a store, for sales by an agent. The ownership of these goods remains with the consigner. The agent sells the goods to the customers on behalf of the sender as per the instructions of the sender.

The consignor bears all the costs of selling the good. The consignee or the agent responsible for selling the good is not responsible for any damages of the goods and whatsoever. The entire risk has to be assumed by the consignor. The consignee is given the temporary possession of the goods until sold entirely on the basis of trust. The consignee has to return back the sales revenue generated from selling the goods and the unsold goods and receives a commission for the goods sold.


Hence, this concludes the definition of Consignment along with its overview.


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