Understanding a consignor definition and the difference between consignor vs consignee is crucial in all manner of contracts between a shipper of goods to a person who receives the delivery. Here, we define consignor to take out any confusion should clarity be needed to fully comprehend the consignee vs consignor arrangements into which so many of us enter.

What is a consignor?

A consignor is an entity that sends out goods to a customer or an agent. The act of sending the goods is known as a consignment. Whether the owners of the goods send those goods to either the end customer directly or an agent looking to profit from those goods in their own way does not matter. The ownership of those goods in the consignment stays with the consignor up to the point that those products included have been totally paid for by the customer or agent, otherwise known as the consignee

How does a consignor work?

Understanding how a consignor works is best explained when looking at the differences between a consignee and consignor. A consignment will always have a consignor and a consignee. The consignor will always send the goods relating to the consignment. In comparison, the consignee is the entity that will always receive the goods and need to pay from them. Selling goods on consignment often works by consignees having the right to return the goods to the consignor. This can be a particularly effective way of working for consignees trying to sell the goods to a third party. It means they do not have to have a vast inventory that they have paid for, which becomes expensive. 

Advantages of a consignor 

By stating what a consignor is from the outset in a contract, the advantages of this business arrangement can be optimized. A consignor must make good on the terms of the purchase by sending the goods requested at a price to which both parties have agreed. Selling goods on consignment is often a good arrangement for both sides if the contract between them is strong enough, as it means the business relationship is established. Without buying on a consignment basis, consignees may never sign up to buy goods from a consignor in the first place. As a result, the consignor makes a sale when he may not have made a sale at all without the use of a consignment order. 

Contractbook and consignor

Contractbook is a great place for two parties who want to start a working relationship on a consignment basis. We have a consignment agreement template in our template library already. It means that a fantastic basis for a reliable contract between two parties is good to go and easily adapted for any person’s needs or requirements. Amendments can be made quickly and easily. Thanks to our software, negotiation between two parties is swift and painless, thus minimizing any administrative burden that creating a contract can cause. 

Additionally, due to the quality of the templates that we have, business relationships are clear and defined - thus promoting a better relationship between parties who know where they stand from the start of any agreement. The result is that the agreement can be leveraged to be more profitable for both sides and beneficial to all. 

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