Consignment
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| Admiralty law |
|---|
| History |
| Amalfian Laws Hanseatic League |
| Features |
| Freight rate · General average Marine insurance · Marine salvage Maritime lien · Ship transport · Shipping |
| Contracts of affreightment |
| Bill of lading · Charter-party |
| Types of charter-party |
| Bareboat charter · Demise charter Time charter · Voyage charter |
| Parties |
| Carrier · Charterer · Consignee Consignor · Shipbroker · Ship-manager Ship-owner · Shipper · Stevedore |
| Judiciary |
| Admiralty court Vice admiralty court |
| International conventions |
| Carriage of Goods by Sea Act Hague-Visby Rules Hamburg Rules Rotterdam Rules UNCLOS |
| International organisations |
| International Maritime Organization London Maritime Arbitrators Association |
Consignment is the act of consigning, which is placing a person or thing in the hand of another, but retaining ownership until the goods are sold or person is transferred. This may be done for shipping, transfer of prisoners, or for sale in a store (i.e. a consignment shop).
Features of consignment are:
- The relation between the two parties is that of consignor and consignee and not that of buyer and seller
- The consignor is entitled to receive all the expenses in connection with consignment
- The consignee is not responsible for damage of goods during transport or any other procedure.
- Goods are sold at the risk of consignor. The profit or loss belongs to consignor only.
The word consignment comes from Fr. consigner "to hand over or transmit", originally from Lat. consignare "to affix a seal," as was done with official documents just before being sent.
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[edit] Second-hand shops
"Consignment shop" is an American English term for second-hand stores that offer used goods at a lower cost than new. Many offer new items as well. In the context of sale, it is usually understood that the consignee (the seller) pays the consignor (the person who owns the item) a portion of the proceeds from the sale. Payment is not made until and unless the item actually sells. The consignor retains title to the item at all times, and can end the arrangement at any time by requesting return of the item. A specified period of time is commonly arranged, after which time if the item does not sell the owner can reclaim the item (or, if not reclaimed within a period of time, the seller can dispose of the item at his discretion).
Merchandise often sold through consignment shops include antiques, athletic equipment, automobiles, books, clothing (especially children's, maternity, and wedding clothing which are often not worn out), furniture, firearms, music, musical instruments, tools, and toys. eBay drop off stores often use the consignment model of selling. Art galleries, as well, often operate as consignees of the artist.
Consignment shops differ from charity or thrift shops, in which the original owner surrenders both physical possession and legal title to the item as a charitable donation, and the seller retains all proceeds from the sale. They also differ from pawn shops, in which the original owner can surrender both physical possession and legal title for an immediate payment, or surrender physical possession of the item in exchange for a loan, and can only reclaim the item upon repayment of the loan with interest or else surrender legal title to the item as well. In the UK, the term "consignment" is not used, and consignment shops selling women's clothing are called "dress agencies". Although the other types of consignment shop exist, there is no general term for them.
The consignment process can be further facilitated by the use of VMI (Vendor Managed Inventory) and CMI (Customer Managed Inventory) applications. VMI is a business model that allows the vendor in a vendor/customer relationship to plan and control inventory for the customer, while CMI allows the customer in the relationship to have control of inventory.
[edit] Procedure
A consigner will bring their second-hand clothes in to be reviewed. After being looked at, a "yes" pile will be made. These are the clothes that will be acceptable for selling in the store. These items are generally in perfect condition and lightly used without any stains/damages/defects. The clothes will be priced at a fraction of their retail price (usually 1/3 to 1/4 of what they originally sold for). When a consigner's item(s) sell, they will make a percentage of the sold price so that the store and the consigner make a profit. Once their clothes sell the consigner is able to receive their profit. Policies differ amongst stores but the concept remains the same. There are also laws against consigning fake designer pieces.
Consignment is distinct from "selling-outright" where a seller brings their items in and receives payment on review.
[edit] References
[edit] Further reading
- Nissanoff, Daniel (2006). FutureShop: How the New Auction Culture Will Revolutionize the Way We Buy, Sell and Get the Things We Really Want. The Penguin Press. ISBN 1-59420-077-7. (Hardcover, 246 pages)
- Holmes, Kate (2009). Too Good to be Threw: The Complete Operations Manual for Resale & Consignment Shops. Katydid Press. ISBN 0-9755886-1-3. (Spiralbound, 202 pages)
