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consignment

kuhn-SAHYN-muhnt /kənˈsaɪnmənt/

nounC1GREGMATTOEFL

businesslegalretail

An arrangement in which goods are left with a third party (an agent or shop) to sell, with the agreement that the seller receives a percentage of the sale price and the agent keeps the rest.

Unlike standard retail where a store buys inventory outright, consignment means the original owner retains ownership of the item until it actually sells.

The story behind the word. The word traces back to the practice of formally signing over goods to a shipping merchant. In the 17th century, to 'consign' something was to deliver it formally into the hands of another, sealed with a signature, trusting them to transport or sell it on your behalf.

Word relationships

agency selling: Agency selling is a broader economic term, whereas consignment specifically implies physical goods placed in a retail space.

outright purchase: An outright purchase involves immediate transfer of ownership and payment, with no future commission.

Commonly confused with

wholesale: Wholesale involves selling goods in large quantities directly to a retailer who then owns them, whereas consignment keeps ownership with the original seller until the final retail transaction.

Word family

consign (verb): To deliver goods to another's custody for sale or custody.
consignor (noun): The person who sends or delivers the goods to be sold.
consignee (noun): The agent or retailer who receives the goods for sale.

Collocations

sell on consignment
consignment shop
consignment agreement
consignment inventory

Example sentences

"She decided to sell her designer handbags on consignment, allowing the boutique to take a thirty percent commission upon sale." A business model explanation in a retail guide.
"The contract specified that any items left on consignment for more than ninety days would be returned to the original owner." A legal dispute over unsold goods.

Memory hook

Think of 'con-signing' a contract with a shop owner: you both sign together to share the profit once the item sells. Sign together, split the treasure.

When not to use

Do not use when goods are sold directly to a store for immediate cash; that is a direct buyout or trade-in.

Fun facts

The consignment model is booming in the digital age, with multi-billion dollar online platforms like The RealReal and ThredUp operating entirely on digital consignment agreements.