A consignment agreement is a signed agreement that details the conditions between a manufacturer or publisher and the party to which the goods to be sold have been consigned.
Consignment agreements are used whenever goods are provided at no cost by one party for safe-keeping and sale by a second party. In such cases, it is important to specify the exact terms under which the goods have been consigned for sale.
Consignment agreements are primarily concerned with opening inventory levels and revenue sharing allocations on sales made, but they can also specify such things as timeframes, payment terms, and disposition of unsold items.
Consignment agreements are very important for the manufacturer or producer because they become the only proof of which items, and how many, were provided to the seller. They also reduce the possibility of future financial disputes.
The sample consignment agreement below was set up in MS-Word and contains all of the key information elements that should be included in a standard product consignment agreement. Although this example involves “books on consignment”, consignment agreements can be used for virtually any type of physical product.
Consignment Agreement – Sample Format