Consignment

Consignment is a process whereby a person gives permission to another party to take care of their property and retains full ownership of the property until the item is sold to the final buyer.[1] It is generally done during auctions, shipping, goods transfer, or putting something up for sale in a consignment store.[2] The owner of the goods pays the third-party a portion of the sale for facilitating the sale. Consignors maintain the rights to their property until the item is sold or abandoned. Many consignment shops and online consignment platforms have a set time limit (usually 60–90 days) at which an item's availability for sale expires. Within the time of contract, reductions of the price are common to promote the sale of the item, but vary by the type of item sold (depending largely on the price point, or whether or not the item can be considered a luxury item).

Consignment stock is stock legally owned by one party but held by another, meaning that the risk and rewards regarding the said stock remain with the first party while the second party is responsible for distribution or retail operations.[3][4]

The verb consign means "to send", and therefore the noun consignment means "sending goods to another person". In the case of retail consignment or sales consignment (often just referred to as a "consignment"), goods are sent to an agent for the purpose of sale. Legal ownership of these goods remains with the sender. The agent sells the goods on behalf of the sender according to instructions. The sender of goods is known as the consignor, and the agent entrusted with the custody and care of the goods is known as the consignee.

  1. ^ "CONSIGNMENT Definition & Legal Meaning". Black's Law Dictionary (2nd ed.). Retrieved March 10, 2023.
  2. ^ "Consignor vs. Consignee". Archived from the original on 8 January 2023. Retrieved 8 January 2023.
  3. ^ Valentini and Zavanella (2003). "The consignment stock of inventories: industrial case and performance analysis" (PDF). International Journal of Production Economics. Retrieved 17 August 2018.
  4. ^ Battini; et al. (2010). "Consignment Stock Inventory Policy: Methodological Framework and Model". International Journal of Production Research. Retrieved 17 August 2018.