Goods on Consignment

Posted in Marketing and Strategy Terms, Total Reads: 630

Definition: Goods on Consignment

Before understanding consignment goods, related terms are consignee and consignor. Consignor is a business or a person who gives consignment of goods to the consignee. Consignee is the business or a person who possesses goods that is consignment and acts as an agent in selling that consignment. In simple words consignor is the seller and consignee is the reseller.

Consignment is an arrangement where goods are given possession to other party (consignee) to sell by owner (consignor). Here merchandise is not owned by the consignee who has possession of the goods. The consignor just gives rights to sell the consignment to the consignee and continues to own the goods until they are sold. In accounting, goods appear as inventory records of the consignor not of the consignee.

In simple terms, consignee sells consignment goods on instructions of consignor.

For Example- Clothes and shoes are given on consignment shops for resale

Consignment deals can be made on variety of products ranging from artwork to clothing to books. Here payments are made only after sales and unsold items will be sent back to the consignor. Consignment shops are quite trendy now-a-days and used for high end fashion products generally.

There are some features of the consignment goods-

• Relation between both parties are of consignor and consignee not of buyer and seller

• All expenses are received by consignor related to consignment and goods are sold at the risk of consignor

• Consignee is not responsible for any damage to products during transportation or any other way


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


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