A consignment is an agreement made when goods are delivered to an agent or customer when an actual purchase has not been made, obliging the consignee to pay the consignor for the goods when sold. This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
Consignment sale refers to a business transaction in which a person, known as the consignor, delivers their goods to another person or business, known as the consignee, who agrees to sell the goods on behalf of the consignor. The consignor retains ownership of the goods until they are sold. Once the items are sold, the consignee keeps a percentage of the sale amount as a commission, while the remaining funds are given to the consignor. This arrangement is commonly observed in retail settings where individuals or small businesses want to sell their products but lack the necessary resources, such as a physical store or online platform, to reach a larger customer base. Consignment sales provide an opportunity for consignors to showcase their goods to a wider audience, effectively reaching potential buyers who frequent the consignee's business or website. For example, let's consider a consignment sale between a local artist, Jane, and an art gallery, Art Haven. Jane creates unique paintings but doesn't have a dedicated art gallery or an online presence to sell her artwork directly to customers. In this scenario, Jane and Art Haven enter into an agreement where Jane provides her paintings to Art Haven for display and sale. Art Haven curates an exhibition showcasing Jane's art to their customers. Once a customer purchases one of Jane's paintings, Art Haven deducts a pre-agreed commission, say 30%, and passes the remaining amount to Jane. There are different types of consignment sales, each tailored to specific industries or products. Some notable types include: 1. Fashion consignment: In this type, individuals consign their gently used or high-end fashion items (clothing, shoes, bags, accessories) to consignment stores or online platforms specializing in second-hand fashion. The consignee handles the marketing, pricing, and selling of the items, providing the consignor with a percentage of the final sale price. 2. Automobile consignment: A consignor looking to sell their vehicle can partner with an automobile dealership or specialty consignment service. The consignee takes care of advertising, negotiating with potential buyers, and managing the paperwork associated with the sale. The consignor receives the sale proceeds minus the consignee's commission. 3. Furniture consignment: Homeowners or interior designers can enter into consignment agreements with furniture consignment shops. The consignee displays the furniture pieces for sale in their store or online platform and handles the sales process. The consignor receives the agreed-upon percentage of the final sale price. 4. Art consignment: Artists lacking their own galleries can consign their artworks to art galleries or online platforms specializing in art sales. The consignee exhibits the artwork, markets it to potential buyers, and facilitates the sales process. The consignor receives a percentage of the artwork's sale price. Consignment sales benefit both consignors and consignees. Consignors gain access to a larger customer base, visibility in established marketplaces or stores, and the opportunity to sell their products without the burden of managing sales procedures. Consignees, on the other hand, have the advantage of offering unique and varied products to their customers, increasing foot traffic or online visitors, and earning a commission on successful sales.
