Goods on Consignment

How to Define the Term Goods on Consignment

Goods on Consignment are those goods held by a firm for release, but which title remains with the manufacturer or owner of the product.


In effect, the merchandiser has agreed to display the goods but, for a variety of reasons, is not willing to purchase them. When and if the retail firm sells the consigned goods, it receives a commission. However, until the sale takes place, the title to the goods remains with the manufacturer, although they are on the premises of a different firm. The manufacturer of the items is willing to accept such an agreement in order to get new or unusual goods into the hands of retailers for possible sale. Retailers agreed this arrangement because they do not have to accept the risks of ownership and will still receive a commission if the goods are sold.