When looking at a consignment agreement, it can be really handy to know the meaning of consignee and what the differences between a consignor vs consignee are. By understanding what does consignee mean, individuals on either side of a consignment agreement can ensure that the contract works well for both parties. Here, we look at a consignee meaning as well as other key points surrounding the term.

What is a consignee?

A simple consignee definition is that a consignee is a recipient of goods being shipped or transported by a consignor. A consignee may be the last holder or owner of the goods being shipped, or they could be an agent for them. A consignee can also often make use of beneficial buying terms, which means that they can send back goods to the consignor if they wish. So, if a consignee is an agent who will transfer or sell goods to another party, this can help with their cash flow management and help improve the efficacy of business models in which they are an agent. 

How does being a consignee work?

A consignee is sent goods from a consignor as agreed to in a consignment contract. That contract will stipulate how and when those goods should be delivered and by whom. It may often be that the consignee also acts like a middleman in that they will often sell those goods to a final customer. Depending on who the final customer is, will have a bearing on how payment is made to the consignor. If the consignee is the person who keeps the ownership of the property, they will pay the consignor - as agreed in the consignment agreement. 

Advantages of a consignee 

The advantage of being a consignee is that you can send back goods that you do not want without having paid for them, though that may not always be the case in every consignment agreement. However, despite that, being part of a consignment agreement should always provide its advantages to both the consignor and the consignee. By simply having a contract to which they are both legally bound provides both sides with assurances. Those assurances can mean that they both uphold either side of the agreement as they legally have to. 

However, it is also essential to acknowledge that having those assurances included in a consignment agreement makes a business relationship on a consignment basis possible. Without those assurances, it is possible that either side would walk away from the business opportunity or transaction. Instead, with a consignment agreement, such a relationship does begin and is strengthened from the outset too. 

Contractbook and consignee

Contractbook can help any potential consignee and consignor create a consignment agreement that is mutually beneficial to both parties. Our contract template library has a consignment agreement template ready to be used or amended as required. Plus, if using our contract management platform, collaboration between both parties is possible so that the end consignment agreement can be created quickly and easily. Negotiations take far less time and getting the contract signed is far more achievable. Plus, the quality of the end contract will be far superior given the ease with which the process is completed, making the contract a far better asset to both parties involved.

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