Consignor definition
/What is a Consignor?
A consignor is an entity that delivers goods to a carrier, for subsequent delivery to a third party (the consignee). The consignor retains legal ownership of the goods until the consignee pays for them, while the consignee acts as the agent for the consignor. The consignee is responsible for selling the goods on behalf of the consignor. Thus, the inventory held at the consignee location is still the property of the consignor until such time as the consignor is paid.
Example of a Consignor
Millwood Corp. produces high-end chairs and tables. It wants to expand its market but does not have its own retail outlets. Instead, Millwood ships its products to a local furniture store (the consignee) to display and sell to customers.
In this scenario:
Millwood Corp. is the consignor because it is sending its goods to be sold, but retains ownership until the products are sold by the furniture store.
The local furniture store is the consignee, which agrees to sell the goods on behalf of the consignor, often taking a commission or agreed-upon payment for its service.
This arrangement benefits the consignor by allowing it to reach customers without owning a storefront and benefits the consignee by offering more products to sell without incurring the upfront cost of purchasing inventory.
Terms Similar to Consignor
A consignor is also known as a shipper or sender.