consignment
Meaning of Consignment:
In an ever growing market for almost every product, it is becoming very difficult for the manufacturer or the wholeseller toestablish a direct link with the ultimate consumers of his products because of largedistance, high cost of marketing through own selling outlets (e.g., branches) andignorance of local conditions. Under these circumstances consignment is a popular way of creating new markets for a product and distributing goods in national andinternational markets. This type of dispatch of goods by one person from one place toanother person at another place is known as the consignment. The word consignmentcan be generally defined as the act of sending of goods by one merchant to another merchant at a different place for the purpose of warehousing and ultimate sale oncommission basis at the sole risk of the sender himself. Goods sent are known asConsignment. The sender of the goods is called the Consignor. Generally forwardedfor the purpose of sale is known as the Consignee. The consignment can be classifiedas:
(1)Outward Consignment: It is called outward when the dispatch of quantity of goodsfrom one country to another is made for the purpose of sale.
(2)Inward Consignment: It is called inward when the receipt of the quantity of goodsis made for the purpose of sale.Goods sent on consignment do not become the property of the consignee. He has not bought them. The ownership remains with the sender o the consignor. If the goods aredestroyed, the receiver (consignee) is nor at all responsible. The loss will fall on theconsignor. The consignee tries to sell the goods according to the instructions of theconsignor. When the goods have been sold, he will deduct his expenses, commissionetc., from the sale proceeds and the balance is remitted to the consignor. Therelationship between the consignor and the consignee is that of principal and agent.The consignee is the agent. The consignee acts entirely on behalf of the consignor.The consignee is
In an ever growing market for almost every product, it is becoming very difficult for the manufacturer or the wholeseller toestablish a direct link with the ultimate consumers of his products because of largedistance, high cost of marketing through own selling outlets (e.g., branches) andignorance of local conditions. Under these circumstances consignment is a popular way of creating new markets for a product and distributing goods in national andinternational markets. This type of dispatch of goods by one person from one place toanother person at another place is known as the consignment. The word consignmentcan be generally defined as the act of sending of goods by one merchant to another merchant at a different place for the purpose of warehousing and ultimate sale oncommission basis at the sole risk of the sender himself. Goods sent are known asConsignment. The sender of the goods is called the Consignor. Generally forwardedfor the purpose of sale is known as the Consignee. The consignment can be classifiedas:
(1)Outward Consignment: It is called outward when the dispatch of quantity of goodsfrom one country to another is made for the purpose of sale.
(2)Inward Consignment: It is called inward when the receipt of the quantity of goodsis made for the purpose of sale.Goods sent on consignment do not become the property of the consignee. He has not bought them. The ownership remains with the sender o the consignor. If the goods aredestroyed, the receiver (consignee) is nor at all responsible. The loss will fall on theconsignor. The consignee tries to sell the goods according to the instructions of theconsignor. When the goods have been sold, he will deduct his expenses, commissionetc., from the sale proceeds and the balance is remitted to the consignor. Therelationship between the consignor and the consignee is that of principal and agent.The consignee is the agent. The consignee acts entirely on behalf of the consignor.The consignee is