Consignment is a business arrangement in which the owner of goods, the consignor, hands them over to another party, the consignee, to sell on their behalf while the consignor keeps legal ownership until an item is actually sold to a buyer. The consignee holds and displays the goods and takes on no financial risk for unsold stock, being paid only a share of the proceeds once a sale is made, while any profit or loss from the item ultimately belongs to the consignor. The arrangement is common in auction houses, consignment shops, shipping arrangements and online resale platforms.
Facts
Core MechanismUnder consignment the consignor keeps legal ownership of goods while a consignee holds and displays them for sale on the consignor's behalf. The consignee earns only a share of the proceeds once a sale happens and carries no financial risk for stock that does not sell, while the consignor bears that risk and any profit or loss, typically within a fixed listing period of about 60 to 90 days. 1 Cross-Tradition Connections
Associated With
Consignment selling, where a store sells goods on behalf of an owner for a share of the proceeds, is a long-standing retail industry practice.
Sources
1. Wikipedia, Consignment
WikipediaWikipedia: Consignment, lead paragraphQuote, Wikipedia: Consignment, lead paragraph
Consignment is a process whereby a person gives permission to another party to take care of their property while retaining full ownership of the property until the item is sold to the final buyer.
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