Consignment
Meaning:-
A business man may like to get his goods sold in a market where he has no direct
operation. For this purpose he selects some local agent there and consigns or sends his
goods to such agents by lots. The business man sending goods is called Consignor. The
agent is known as Consignee, he (consignee) sells goods on behalf of the Consignor. And
charge a commission on sales.
Features :-
● It is an agreement of sale on the agency system.
● The consignor is the principal of the goods.
● The consignee is the agent.
● The consignor does not sell the goods directly to the buyers
● The consignor transfers the possession of the goods to the consignee. But the
ownership is transferred directly to the buyers.
● The profit or loss on the goods sold belongs to the Consignor. The consignee’s
reward is the commission.
● The consignor bears all expenses directly or indirectly relating to the goods. Eg-
carriage charges. Insurance. Accidental loss,etc.
Benefits:-
1. It is actually an extension of his marketing zone by a manufacturer or
wholesaler without opening a branch at a place other than his own.
2. Opening branches at different places may not be logical or economical.
3. It yields the sweet harvest of mutual dependence. The Consignor can peep
into the market outside his own with the Consignee promoting his sales.
4. If the Consignor finds that the marketability of his goods is not satisfactory at
a place of some consignee or if the Consignor does not feel satisfied with the
service of any consignee. He can easily call it a day and arrange for a
replacement or substitution. Similar for the Consignee.
Important terms:-
● Consignor-
The person (Principal) sending the goods to his agent.
● Consignee -
The agent who takes up the responsibility to sell the goods of the Consignor in
lieu of commission.
● Performa Invoice-
Icymii:)
Meaning:-
A business man may like to get his goods sold in a market where he has no direct
operation. For this purpose he selects some local agent there and consigns or sends his
goods to such agents by lots. The business man sending goods is called Consignor. The
agent is known as Consignee, he (consignee) sells goods on behalf of the Consignor. And
charge a commission on sales.
Features :-
● It is an agreement of sale on the agency system.
● The consignor is the principal of the goods.
● The consignee is the agent.
● The consignor does not sell the goods directly to the buyers
● The consignor transfers the possession of the goods to the consignee. But the
ownership is transferred directly to the buyers.
● The profit or loss on the goods sold belongs to the Consignor. The consignee’s
reward is the commission.
● The consignor bears all expenses directly or indirectly relating to the goods. Eg-
carriage charges. Insurance. Accidental loss,etc.
Benefits:-
1. It is actually an extension of his marketing zone by a manufacturer or
wholesaler without opening a branch at a place other than his own.
2. Opening branches at different places may not be logical or economical.
3. It yields the sweet harvest of mutual dependence. The Consignor can peep
into the market outside his own with the Consignee promoting his sales.
4. If the Consignor finds that the marketability of his goods is not satisfactory at
a place of some consignee or if the Consignor does not feel satisfied with the
service of any consignee. He can easily call it a day and arrange for a
replacement or substitution. Similar for the Consignee.
Important terms:-
● Consignor-
The person (Principal) sending the goods to his agent.
● Consignee -
The agent who takes up the responsibility to sell the goods of the Consignor in
lieu of commission.
● Performa Invoice-
Icymii:)
