Consignment

There are many commercial arrangements by which merchandise may be sold. The most common are outright purchase and consignment. In the outright purchase arrangement, merchandise is acquired, title is transferred from the seller to the buyer, and the purchase price is due when the goods are delivered. Under a typical consignment arrangement, the consignor delivers an item to a consignee. The consignee does not make an outright purchase of the goods, but rather, agrees to remit to the consignor the proceeds of sales less the consignment commission as sales are made. Generally, the consignee is under no obligation to sell the goods and may return them to the consignor at any time.