Creating a Robust Consignment Contract: A Guide for Consignors and Consignees


A Consignment Contract is essential for both Consignors and Consignees and ensures that both parties are aware of their obligations and responsibilities. This article provides some guidance on creating a solid Consignment Contract which can easily be tailored to your individual Consignees.

1. Description of Goods

Clearly describe the items that the Consignee is entrusting to the online consignment store for sale. Details should include the type of goods, the quantity, and any other relevant information.

2. Consignment Period

Make sure to state the length of the consignment period. Most consignment stores have a fixed consignment period for all Consignees which allows for more efficient management of multiple products.

3. Commission and Fees

The commission rate should be clearly outlined in the contract, as well as any additional fees or charges that may be associated with the consignment process. Commission rates vary but typically ranges from 30% to 50% of the sale price of the item. Some stores may charge a lower commission percentage for high-value items, while others may charge a higher percentage for items that are difficult to sell or require additional marketing efforts.

4. Payment Structure

The payment structure should be clearly defined, including the timing and method of payment.

For example:

The Consignee agrees to pay the Consignor a percentage % of the sale price of each item sold through the consignment store.

The payment shall be made within a specified number of days after the sale is completed and the item is shipped to the buyer.

The Consignor may request payment at any time for items that have been sold and shipped.

The Consignee will provide a monthly sales report to the consignor that indicates the items sold, sale price, commission, and net payment due to the consignor.

The Consignee may deduct any fees associated with shipping, handling, or other services provided to the buyer from the sale price before calculating the commission owed to the Consignor.

Note: This payment structure is just an example and may vary depending on the specific terms of the consignment agreement.

5. Shipping and Handling

Specify who is responsible for shipping and handling costs, as well as any other associated fees. For example:

The Consignee is responsible for shipping the item(s) to the buyer upon completion of the sale.

The Consignor is responsible for packing the item(s) securely and ensuring that they are in good condition for shipping.

The Consignee may charge the buyer for shipping and handling fees, which will be deducted from the sale price before calculating the commission owed to the Consignor.

The Consignee shall provide tracking information to the Consignor once the item(s) have been shipped.

In the event that the item(s) are returned by the buyer, the Consignor shall be responsible for any return shipping costs, unless otherwise agreed upon by both parties.

Note: This shipping an handling structure is an example and may vary depending on consignee/consignment store.

6. Condition of Goods

The contract should clearly state the condition that the goods should be in when they are received by the online consignment store. This will help avoid any disputes regarding the quality of the items being sold.

7. Liability and Insurance

Outline the liability and insurance responsibilities of both parties. This will ensure that both parties are protected in the event of any damages or losses.

8. Termination and Withdrawal

Make sure to specify the process for terminating the consignment agreement and withdrawing items from sale.

9. Dispute Resolution

The contract should include a dispute resolution clause, which outlines the process for resolving any disputes that may arise between the Consignee and the online consignment store.

Sample PDF to Get Started

There are many elements that need to be considered and included in a contract with your Consignees. To help you get started, here is a sample pdf.

Sample Consignment Contract

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