Creating a Consignment Agreement for Your eCommerce Business


An eCommerce consignment agreement authorizes someone else to sell your products on your behalf. Even after deducting the consignor’s fee or commission, selling in this manner may result in a higher price. Learn more about how this agreement works and how to create one.

What is an eCommerce Consignment Agreement?

An eCommerce consignment agreement, which is a contract between the consignor and the consignee, should have the following essential clauses:

Creating a Consignment Agreement for Your eCommerce Business
  • Parties. List the consignor’s and consignee’s names and addresses.
  • Item(s) available for sale. Specify or describe the item(s) that are being sold.
  • Pricing. The item’s sale price or a statement that it will be sold for a fair price considering its age and condition should be specified in the contract. The contract may let the consignee reduce the item’s price with or without the consignor’s consent.
  • Payment. After deducting any fees or commissions, the consignee can demand compensation from the buyer and must pay the consignor the remaining balance. How long the consignee has to pay the consignor must be specified in the contract.
  • Expenses. What, if any, expenditures the consignee is accountable for should be included in the agreement.
  • Record-keeping. The consignee must keep records related to the consignment.
  • Ownership. The consignor is often listed as the valid owner in the contract, and the consignee is liable for the item’s upkeep and any loss or damage that occurs while it is in the consignee’s control.
  • Insurance. It is standard practice to require the consignee to hold insurance protecting the consigned goods.
  • Termination. The contract details how it may be canceled, including by a specific date if the item remains unsold, if the consignee files for bankruptcy, vacates the region, passes away, or if the consignor passes away.
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Types of Consignment Arrangements

An eCommerce consignment agreement might be exclusive or nonexclusive. If it is exclusive, only the consignee can resell the consignor’s property. If it’s nonexclusive, it might be that other consignees are making similar sales efforts.

Creating a Consignment Agreement for Your eCommerce Business

Typical Examples of Consignment Merchandise

Clothing and home furnishings are frequently consigned products. Contracts for these sorts of consignments sometimes include terms that state that if the committed item is not sold by a particular date and the consignor does not pick it up within a given number of days, the item will be donated to charity.

Automobiles are also occasionally offered on consignment. Instead of selling your automobile to a dealer at a price below market value, you place it on consignment with them. Most of the time, the automobile will sell for a price closer to its market worth, and you will likely make more money even after paying the consignee’s charge or commission.

Best Way to Create a Consignment Agreement

Creating a Consignment Agreement for Your eCommerce Business

You may build your own eCommerce consignment agreement by looking at samples online; however, to ensure that your agreement corresponds to state law and fully protects you, it is better to deal with an attorney or an internet service provider who can develop a professional and thorough consignment agreement.

In Conclusion,

An eCommerce consignment arrangement might be an excellent approach to selling anything that you do not wish to sell yourself. The consignee is in charge of marketing and sales and receives a commission. And you get the most of the sale price without having to do any labor. We hope this post is helpful to you, and if you have any further questions, please contact us today!

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