EntertainmentContracts.com
Home/Merchandise Consignment Agreement

Merchandise Consignment Agreement

For creators, shops, and venues arranging the sale of merchandise on consignment.

Drafted by a Harvard Law attorney.

How would you like this contract?

Pick an option to continue.

Custom Contract

Answer a few guided questions and we'll create your contract with your answers built in. E-sign or download when you're done.

Recommended for most users

Answer a few questions

About 2 to 5 minutes

Editable Template

Download a blank version in Word or PDF that you fill out yourself. Every spot to fill is highlighted in yellow.

Get the contract template

Download instantly

Custom Contract or Editable Template?

Compare the two options before you choose.

FeatureCustom ContractEditable Template
Best forMost usersEditing everything yourself
How it worksAnswer guided questionsFill highlighted fields yourself
Word and PDFYesYes
E-signatureYesNo
Time requiredAbout 2 to 5 minutesDepends on your edits
Price$50$50

Need more than one contract? Buy this contract for $50, or compare plans for multiple contracts.

Compare plans

Key Points Covered in This Contract

  • Inventory and retained ownership: A delivery inventory identifies goods and condition while ownership stays with the owner until retail sale.
  • Retail prices and commission: Agreed retail prices and commission percentages prevent unapproved discounting or deductions.
  • Monthly reports and settlement: Monthly reports show sales, returns, commission, and remaining stock, with a selected settlement deadline.
  • Care, loss, and customer returns: Care duties, documented damage claims, and customer-return adjustments allocate responsibility without double recovery.
  • Unsold stock and final accounting: Ending the arrangement triggers return of unsold goods, a final inventory, and payment of the balance.

Selling Goods on Consignment

Consignment places an owner's products with a shop, venue, or other seller who offers them to customers and accounts for sales. The owner supplies stock while the seller provides display space, customer contact, and transaction handling. Inventory moves through deliveries, sales, returns, and replenishment, making quantities and condition important throughout the relationship. Regular sales reports connect the stock on hand with the money collected. The arrangement can help creators test demand or reach customers without immediately transferring ownership of all the goods.

Consigned stock needs to be identifiable from the moment it reaches the selling location. Item descriptions, quantities, prices, and condition records provide a starting point for later reconciliation. Presentation affects whether customers notice and understand the products, while replenishment keeps successful items available. Unsold goods may need to be rotated or returned as demand, display space, or the selling season changes.

The owner contributes the products and relevant information, while the seller handles the daily customer interaction and sales records. Regular communication helps resolve questions about damaged items, returns, or stock discrepancies. Sales reports should connect the physical inventory with recorded transactions and amounts due. That continuing exchange gives both parties useful information about demand without requiring the owner to operate the retail space personally.

Frequently Asked Questions

Does consignment authorize the seller to manufacture more products?
No manufacturing permission follows merely from receiving goods to sell. Consignment concerns stock supplied by its owner; producing new goods or copying designs requires separate rights and arrangements. Selling out of an item does not authorize the consignee to reproduce it.
When does the owner receive sales proceeds?
Monthly reporting should have a clear deadline for paying the owner's share. The sales report identifies sales, authorized adjustments, commission, and remaining inventory, so both sides can reconcile what was sold and what is still held.
Can the seller discount the goods?
Discount authority depends on the consignment arrangement. The seller may have limited discretion or need the owner's approval before markdowns. Discounts, sales taxes, commissions, and other deductions affect the amount returned to the owner and should be visible in the sales records.
Are consigned goods automatically protected if the seller becomes insolvent?
Not necessarily. A contract saying the owner keeps title may not settle competing creditor claims. Local rules can require notices, registrations, or other steps to protect the owner's interest. Keeping the goods identifiable and maintaining inventory records is useful but may not be sufficient by itself.
Who pays for unsold stock to be returned?
Delivery, collection, and return freight may be allocated separately from the sales commission. The parties also need to consider packaging, insurance, and a reasonable collection period. Unsold goods do not automatically become the seller's property simply because the selling period has ended.

Related Contracts

Create Your ContractBrowse contracts by industry