FLUF / THE SELLER REFERENCE
Consignment meaning: consignor, consignee and sales splits
An arrangement in which an owner places goods with another party to sell, typically retaining ownership until sale, with payment and commission governed by their agreement.
Who is the consignor and who is the consignee?
The consignor supplies the goods; the consignee takes them to sell under the agreed arrangement. In a typical consignment model, the supplier is paid after a sale rather than receiving an ordinary wholesale purchase payment upfront. The actual agreement determines responsibilities and payment terms. Typically, the consignor retains ownership until sale, subject to the agreement; delayed payment alone is not what distinguishes consignment from a wholesale purchase on credit.
A worked sales split
Suppose an owner places a coat with a shop. It sells for £100 under an illustrative agreement giving the owner 70% of the sale price and the shop 30%. That is £70 and £30 respectively before separately agreed deductions. If the split is instead calculated after fees or delivery, the amounts change. Record the basis clearly.
Consignment versus wholesale
In a conventional wholesale purchase, a retailer buys stock for resale. Consignment generally postpones the supplier’s proceeds until sale and leaves unsold-stock arrangements to the parties’ terms. A low upfront stock cost does not mean the seller has no responsibilities or operational costs.
What should the stock record contain?
Keep the owner, item identifier, agreed asking price or discount authority, split basis and settlement status attached to the correct item. Two similar coats from different owners should not share an indistinguishable record. Photograph condition at intake so later questions can be answered from evidence.
What happens to unsold or returned items?
Follow the arrangement agreed with the owner. It should address the selling period, collection of unsold goods, authorised markdowns, handling of customer returns and timing of settlement. This glossary explains the model; it does not establish contractual rights or substitute for the terms of a particular agreement.
Put it into practice
Explore consignment management. For selling across marketplaces, see FLUF Connect crosslisting and current plans and pricing.
Related terms
Reference
Primary reference: Shopify. The examples on this page are illustrative, not customer results or universal benchmarks.
