What is consignment meaning?

Consignment refers to the process in which a seller (consignor) hands over the products to another party (consignee) to sell on their behalf. The consignor retains the ownership of the goods, and the consignee receives a commission on the sale of the goods. Consignment is common in the retail industry, where stores sell products on behalf of individuals or manufacturers. It allows individuals and small businesses to reach a larger market without incurring the costs of maintaining a physical store. Consignment also reduces the risk of excess inventory for both parties involved, as the consignor only pays for sold items, and the consignee does not need to purchase inventory upfront. However, consignment also involves certain risks and challenges, such as potential disputes over pricing, damage or theft of goods, and difficulty in tracking inventory.