Consignment

Consignment refers to a trade arrangement in which the consignor (principal) delivers goods to the consignee (agent), who sells the goods on behalf of the consignor according to the terms and methods stipulated in the consignment agreement. After the goods are sold, the consignee deducts commission and expenses from the proceeds and pays the balance to the consignor. Its characteristics are: goods are shipped before sale; ownership of the goods remains with the consignor until sold; the consignee does not bear sales risk. Use cases: often used for launching new products, clearing excess inventory, and establishing sales channels. Precautions: the consignor and consignee must sign a clear agreement specifying commission, expenses, selling price, settlement method, etc.; the consignor bears risks such as warehousing, insurance, and loss/damage during the consignment period; when exported, goods are usually handled as temporary export or bonded goods, and formal export procedures are completed after sale. Difference from other terms: consignment differs from agency—agency usually sells in the agent's name, while consignment sells in the consignee's name but the risk is borne by the consignor; it also differs from distribution—distribution is a buyer-seller relationship, while consignment is a principal-agent sales relationship.