What Is Consignment?
Consignment is a business model in which a reseller (consignee) agrees to pay its supplier (consignor) for merchandise after it has been sold. Consignment goods are typically sold through consignment stores, which receive a percentage of the sale revenue (sometimes a very high percentage) as a commission.
In other words, the supplier entrusts the reseller with products without collecting payment, and the consignor offers them for sale in their store. However, the consignor retains ownership of the products until they are sold, even if they are in the resale business.
Consignment sales involve various products, such as clothing, antiques, collectibles, furniture, toys, shoes, jewelry, etc. In recent years, there has been an increase in eCommerce-based consignment stores. Also, consignment does not typically include large retail chains such as Walmart or most supermarkets, which purchase goods directly from wholesalers and then sell their items at a profit.