What to Include in a Consignment Agreement


When you decide to work with a store owner on a consignment basis, you want to be sure you have some sort of an agreement in place so that you both have an expectation as to what your rights and obligations are.


The store may have their own consignment agreement or contract, however, you may want to have your own ready in the case that they don’t, or in the case that theirs doesn’t cover all the areas you’d like to.


Here are 5 things to consider when drafting your terms or agreeing to theirs:


1) Time Frame

Determine the length of time you want to leave your items in the store for, before you have the option of picking them up. If you sell seasonal items, a month-to-month basis may work best so that you have time to take them back and sell them on your own before a season is over. For stores with lower traffic, you may want to have a longer consignment cycle.



2) Shipping

If the store you’re dealing with is not in your area, there needs to be an agreement as to who is responsible for shipping charges. You may work out a split deal where you pay for the shipping to the store and they paid for the shipping back to you in the case of any unsold items.



3) Percentages

You will set the retail price of your items but you need to outline what percentage each party will receive when an item is sold. The store will most likely have a rate set in place for consignment so you’ll just want to make note of this in your agreement. Or, even if the retailer has set consignment rates, you may want to consider negotiating with them to get one you’re happy with.



4) Payment

It’s important to have an agreement as to when you will be paid for sold items and have them stick to it; late payments may be a sign of financial problems. Determine whether you will be paid by money transfer or cheque and if it will be mailed to you or be available for pick up.



5) Incidentals

Outline what will happen in the case that an item is lost, stolen or damaged. Whether this happens in their store or during transit, you want to have an agreement in place as to who is responsible.


Depending on the store and type of products you sell, there may be more things to consider but this is a good place to start!


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One Comment

  1. Joyce Rosselli says:

    Thank you for these hints on consignment tips. I have been asked to place my work in a shop and I am considering approaching others. I have also been requested to do workshops so there are quite a few points to consider for both. Joyce

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