Consignment: what is this form of selling goods? Consignment in different types of commercial relationships

Consignment is one of the forms of commission sales of goods, in which the owner of the product transfers it to the warehouse to the second subject of the transaction.

In this case, the object of sale remains the property of the first person until the moment until it is transferred to the final buyer. In this regard, there is a practice of returning the goods to the original owner at his expense if, over an extended period of time, they are not ultimately sold.

Features of consignment

The term "consignment" comes from the Latin word " consignatio" IN English language concept " consignment"means document or written evidence.

Consignment, as a rule, means a mixed type of contract, which is quite often used in trade practice. It combines some features of commission transactions, delivery, and distribution storage.

The consignment agreement has found wide application in customs affairs. This is due to the presence of special storage warehouses and international standards for the work of sellers and buyers. Most often, such transactions are used in the presence of goods whose sales period is difficult to predict due to one reason or another.

IN Russian Federation Current legislation does not provide for the preparation of consignment agreements. As a result, they are subject to the rules that apply to transactions relating to the supply of products.

In some cases, this type of agreement is equivalent to commission agreements for foreign trade . They are often also called import-export transactions, which are concluded for the purpose of selling goods.

General provisions

All goods that are in warehouses until further sale remain the property of the seller. In this case, the distributor ultimately receives an appropriate financial reward for storing the products.

Consignment can have several similar meanings, such as:

1. A document or agreement between intermediaries.
2. List of special terms of payment or payment for goods.
3. Agency agreement, etc.

Consignment warehouses in the United States of America are commonly called bonded warehouses. In Russia, their role is played by customs warehouses.

Any consignment agreement can have a completely arbitrary name, which can reflect its essence. This norm corresponds to the current principle of free contracts. For example, deals for the supply of goods on consignment terms are popular.

Parties to the agreement

The parties to the consignment agreement are the consignor - the owner of the goods, and the consignor - the seller of the goods, who has the latter in storage.

Actions of the consignee, according to the terms of the contract, must comply with the following standards:

• This subject of the transaction must engage in the sale of goods without performing any further actions with them.
• This subject of the transaction must have free warehouse premises in which the delivered goods can be stored for a certain period of time.
• For the entire period specified in the document, goods must remain in the warehouses of the given subject of the transaction, if they are not sold accordingly.
• This subject of the transaction cannot have ownership rights to the goods that are stored in his warehouse.
• After the expiration of the shelf life of the goods, the consignee must return them to the consignee, unless otherwise provided in the document.

In some cases, the consignor is responsible for storing the goods. If any problems arise with them, he must financially compensate for the losses.

The parties to the consignment agreement may be citizens or residents of different countries. This is due to the peculiarities of concluding these transactions. At the same time, if the parties to the agreement represent the same country, this will not should not affect the document drawn up between them regulating the rights and obligations of the parties.

Main advantages

The popularity of concluding consignment agreements is due to factors such as:

1. All rights to the goods until they are sold remain with the consignor.
2. If it is impossible to sell the product, the consignor may pick it up from the consignor.
3. Possibility of transferring goods into the ownership of the consignor if they are not sold.
4. Payment of customs duties and taxes directly due to the actual sale of products, and not their receipt at the warehouse.

There are several types of consignment agreements currently in use. According to the method of returning the goods, they may be refundable, partially refundable and non-refundable. Depending on the affiliation of the parties to transactions, they are internal and external (or international).

Supply management in commercial activities requires the use of various cost reduction tools.

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One of these is consignment. What does the concept of a consignment warehouse mean in 2019? Purchasing activities in business involve significant costs.

In market conditions, to reduce costs, suppliers and buyers use various non-standard methods in the field of supply management. One effective method is a consignment warehouse.

Important aspects

Methods for selling goods in commercial activities may be different. The choice of a particular option is determined only by the capabilities of the seller.

When it comes to wholesale sales, then the choice of form of sale is influenced by the presence or absence storage facilities.

If the seller does not have his own warehouses, he has to store goods for a certain period until the moment of sale.

Accordingly, renting warehouse space entails additional costs. In addition, the question remains of how quickly the product can be sold.

In a situation like this effective way The solution to the problem is consignment.

This term refers to a method of selling goods when the seller (consignor) transfers the goods to the warehouse of the commission agent (consignee) for the purpose of subsequent sale, but the goods remain the property of the consignor.

Thus, the seller can choose one of two options for selling the goods:

1. Independently, without involving third-party sellers.
2. Through an intermediary, using a consignment warehouse.

What it is

Consignment warehouse represents a type of economic relationship when the seller delivers goods to the buyer from a warehouse located on the buyer’s territory.

Moreover, the buyer makes payment for the selected volume upon delivery. The seller pays rental payments to the buyer under a separate agreement or includes the amount in the cost of the goods sold.

Until the moment of delivery to the buyer, the goods in the warehouse belong to the seller. Payment is made based on the results of a certain period or upon shipment of each individual batch of goods.

To explain it more simply, a consignment warehouse is a warehouse of a commission agent (intermediary) in which the goods of the consignor (seller), who has ordered to sell the goods at .

That is, a place for storing a consignment of goods entrusted to a commission agent for sale. After the consignor (commission agent) sells the goods, according to the terms of the previously concluded agreement, he pays the consignor a certain amount.

In this case, the intermediary retains a certain percentage for storing and selling the goods. According to the above, a consignment agreement can be defined as.

The consignee, based on the instructions of the consignor, undertakes to sell within a certain period of time on his own behalf the goods delivered to the warehouse for a commission, and at the same time, until the moment of sale, the goods remain the property of the consignor.

Advantages and disadvantages

A consignment agreement is often used when carrying out commercial turnover of large quantities of goods.

This form of sales is especially often used in cooperation with foreign companies.

This implementation option is considered optimal and takes into account the interests of all parties. Economic benefits are present in in this case, both for the consignor and for the consignee.

Economic relations based on trust contribute to maintaining high positions in the market. This is determined by:

• restraining price policy seller;
• large trade turnover;
• moderate expenses of the consignor, expressed in commission to the commission agent;
• the consignor's interest in effective sales.

Using a consignment warehouse for the seller of goods is a way to reduce costs for storage, delivery of small quantities, and searching for buyers.

In fact, the entire task for the exporter comes down to delivering the goods to the warehouse of the commission agent. For the consignee, the use of this form of sales becomes a way to generate income from sales.

He does not need to engage in production or purchasing of goods. For him, the task is to preserve the goods in proper form and sell them to end consumers.

Such profitability contributes to the fact that consignment warehouses are often used in foreign trade.

If it is not economically profitable for the seller to purchase his own warehouse, he can use the consignment method.

Until the goods are sold to the buyer, the consignor (exporter) remains the owner. However, it must be taken into account that in this case, the release of goods from the warehouse is possible only with the permission and under the control of the customs authorities.

Consignment warehouses are also used in domestic trade. As a rule, this option is chosen by manufacturers who decide to expand their business, but do not have their own warehouses in other regions.

The consignor in this case acts as an agent representing the interests of the consignor-manufacturer. The disadvantages of using consignment warehouses logically follow from their advantages.

The commission agent does not always manage to sell the goods on time. In some cases, part or even the entire batch remains unclaimed. This leads to the need to return the goods.

And in this case, controversial situations arise regarding who owes what to whom. To avoid conflicts, such points should be specified in the contract in advance.

Normative base

Consignment agreements are not regulated in any way by Russian law. Moreover, the terms “consignment” and “consignment warehouse” are, in principle, not defined by Russian laws.

Video: receipt of goods in 1C Trade Management

From another perspective, a consignment agreement can be classified as a variety, since the essence of the transaction comes down to the payment of a commission for intermediary services.

How to draw up a contract correctly

A standard consignment agreement includes the following items:

Payment Features

Payment in consignment transactions involves the payment of remuneration to the commission agent. The procedure for determining the required amount may differ:

These methods can be combined. For example, the exporter sets his own price and pays a commission on each sale, but does not prohibit the seller from increasing the cost of the product.

A consignment agreement is a document that is concluded to carry out purchase/sale in foreign trade. It is not directly provided for by the legislation of the Civil Code of the Russian Federation. In legal essence, this agreement is mixed (clause 3. The parties, according to this document, agree on the rules, the elements of which are contained in the mixed agreement. Basically, the consignment agreement determines the relationship between the supplier (seller) and the distributor (buyer). For this reason, the provisions of the Civil Code of the Russian Federation can be applied to it about the supply agreement.

This document also contains elements of a commission agreement. Usually it contains signs if the goods will be stored in a warehouse of third parties. In some cases, the consignee acts as the custodian. An agreement for the consignment of goods may also contain some elements of an agreement for the provision of services - market monitoring, marketing, delivery, transport expedition, and so on.

The term "consignment"

This term has quite a lot of meanings. This word can be used to describe a document, a special procedure for the delivery and payment of goods, an intermediary agreement, an agency contract and much more. Due to the broad interpretation of the term “consignment,” what it actually is can be difficult to define. Sometimes this leads to litigation. This can be explained If consignment is defined, then all interested parties will clearly understand what their obligations are, but if specific terms of cooperation are not specified, then it becomes unclear how the concluded agreement differs, for example, from a commission or delivery.

Consignment as a form of sale of goods

Consignment should be considered as a form in which the owner of the goods transfers it for further sale to the buyer. In this case, the supplier remains the owner of the products delivered to the consignee throughout the entire period the goods are in the latter’s possession. The consignment agreement for the sale of goods must clearly define this point. That is, this definition or any other similar to it should definitely be reflected in the text of the agreement itself.

What is the advantage of a consignment agreement?

An agreement for the sale of goods, in which ownership rights to it remain with the supplier, is called consignment. It is clear that this is not an ordinary delivery. That is, the buyer does not become the owner of the delivered products at the time of their transfer to him. It turns out that the consignor will always be able to withdraw unsold goods from the consignee from the warehouse if the latter turns out to be an insolvent counterparty. This is the advantage of choosing such an agreement.

Features of payment for goods when transferring them under a consignment agreement

Payment for delivered products is made according to accounts receivable, that is, in installments. In some cases, price collusion, unilateral refusal of fulfilled obligations, punitive agreements and other measures are chosen as a method of securing obligations.

Terms of agreement

The consignment agreement may contain conditions not only for the sale, storage, but also for the promotion of goods in a certain territory. In this case, sales representatives directly contact points of sale regarding the sale of goods. Sales representatives are employees of either the supplier or the buyer. It is possible to involve intermediaries, with whom a document on financial liability is concluded.

Often, consignment, which is already known in trade practice, includes conditions stipulating the procedure for advertising the goods. This includes the following: carrying out sweepstakes, tastings, test drives and other promotional events with the participation of interested consumers. The agreement also reflects the terms and conditions regarding the time and place of the advertising campaign, monitoring the availability of goods at the point of sale, its display, and so on.

Forms of agreement

There is a simple, partially returnable and irrevocable consignment. What are these forms and how do they affect the organization of product sales? Partially returnable consignment implies the buyer's obligation to buy from the supplier an agreed quantity of unsold goods. The non-returnable form does not give the consignor the right to return unsold goods; they must purchase them in full.

However, the problem of guaranteed sales cannot be solved using the consignment form. It is clear that if the consignor is unable to successfully sell the goods, the partners will analyze the current situation to determine the reason for the failure. As a rule, the main factor of low demand is the uncompetitiveness of products - insufficient technical level of the product, high level prices, much more.

Consignment is a form of commodity-money relations in which the owner of a certain product transfers it to another person for sale. As a rule, such agreements are concluded for a strictly defined period (for example, 1 year). In this case, the following conditions are strictly observed:

• for his services, the seller will receive some remuneration (usually a pre-agreed percentage of the amount received from the sale of goods; in other words, a commission);
• until the moment of sale, the goods will be stored in the seller’s warehouses (although technically it remains the property of the consignor owner);
• If the sale of the goods does not take place within the agreed time frame for reasons beyond the control of the commission agent, the products are returned to the owner (and the shipment is carried out at the expense of the latter).

All of the above provisions are necessarily stipulated at the time of concluding the relevant agreement between the actual owner of the goods (consignor) and its seller (consignor). At the same time, the question of who exactly and under what conditions bears the costs associated with the transportation and sale of specific products is resolved. Typically, these obligations are assigned to the exporter.

The consignment agreement can also be international

Depending on which legal entities (or individuals) such a transaction was concluded between, consignments are:

1. internal (if both parties to the contract are residents of the same state);
2. international (or international).

The classification of consignments proposed above on a regional basis is generally accepted. However, it is not very popular among specialists. After all, by classifying transactions only on a regional basis, it is impossible to quickly obtain information about their specifics.

Much more important for a specialist is data on the conditions for returning goods that were not sold as part of consignment. This is a very significant aspect. After all, no one can give a 100% guarantee that the products entrusted to the commission agent will find their buyer on time. And it's not always the seller's fault.

The reason for delays in the sale of goods may be its inflated cost or initially low competitiveness. In both cases, the exporter faces a difficult choice. The owner of the product will have to either change (for example, lower its price) or issue a return of the product from the commission agent. However, some other options are possible. Actually, on this basis, consignments are divided into:

1. Returnable. In this case, goods not sold on time are returned to the owner's warehouses in full.
2. Partially refundable. By concluding such an agreement, the commission agent undertakes to sell a certain volume of goods within a specified time frame. If this does not happen, the seller will be forced to buy the “missing” amount of products from the owner.
3. Non-refundable. In such cases, the exporter generally does not consider the possibility. This means that if all the products entrusted to the commission agent are not sold on time, he will be obliged to reimburse the owner for the full cost of the received batch.

Signs of consignment

Consignment agreement: sample

The fact that in this particular case we are talking specifically about consignment, and not about some other type of commodity-money relations, can be judged by some characteristic features of the described agreement. In particular, we are talking about the following points (all the provisions described below are usually mentioned in standard contract regulating the transaction):

• The prices for the goods sold, as well as the time frame within which they must be sold, are agreed upon by the parties to the agreement in advance.
• The products entrusted to the commission agent are not his property. The only exceptions are those cases when, after the expiration of the transaction period, the consignor, at his own expense, buys back the unsold part of the goods from the owner.
• The place where the goods are stored by the commission agent until they are sold (usually a specially equipped warehouse) is also agreed upon in advance.
• The consignor bears all costs associated with the transportation and sale of his goods.
• The exact amount of remuneration due to the commission agent is negotiated before the conclusion.

The last item on the list is worth considering in a little more detail. How is the amount of remuneration for a commission agent determined? This usually happens in one of the following ways:

• In the first case, the commission agent receives a pre-agreed percentage of the value of each transaction he makes.
• In the second, the seller himself works for his own remuneration, selling products at prices higher than those requested by the supplier and taking the resulting financial difference for himself.
• And finally, in the third, the amount of the commission is calculated based on the total cost of the goods transferred for resale.

From all of the above, it becomes clear that from a legal point of view, consignment is almost the same as a contract of agency. The only significant difference between these two types of transactions is the following. Working under a contract of agency, the seller has the right to conduct business only on his own behalf. own name. While the consignor-seller can also act on behalf of the supplier of the goods.

However, there is one more important point that should be mentioned. The fact is that consignment agreements are not regulated in any way by the legislation of the Russian Federation. Only some of their principles fall under the jurisdiction of the Russian Civil Code. That is why such transactions should be made with great caution. Moreover, this warning applies to both the consignor and the consignee.

More information about the consignment agreement

The consignment agreement is drawn up accurately

Technically, the paper signed when concluding a consignment is only one type of commission agreement. This document also addresses all aspects relating to the timing and object of the transaction.

The role of the latter in this particular case is the product being prepared for sale. As for the terms of the transaction, they can be arbitrary. There are no specific time limits for transactions with consignment in the legislation of the Russian Federation.

Here, however, one very important digression should be made. When talking about consignments, it is unacceptable to confuse concepts such as “deal term” and “contract term”. In the first case, we are talking about the time period during which the goods entrusted to the commission agent must be sold. In the second - about the terms for which cooperation between the parties to the agreement will apply.

What else, besides temporary factors, is necessarily mentioned in the documents regulating the transaction being described? A typical consignment agreement usually consists of the following points:

1. General provisions. This paragraph describes in detail the essence of the transaction. In other words, it is stipulated that we are talking specifically about consignment, that is, the transfer of goods from one person to another for the purpose of subsequent sale of the product.
2. Subject of the agreement. This point is reserved for detailed description goods being prepared for sale. The exporter indicates the name, cost, and other important characteristics of his products. Here he also gives guarantees that the sale of the described product is completely legal. The latter is possible only if the products are not classified as prohibited, are not a means of providing for third parties, and are not placed under arrest for the owner’s debts.
3. Rights and obligations of the parties. We have already partially touched on this aspect in the previous parts of the article and will return to it again below.
4. Ownership rights to products sold. This paragraph once again emphasizes that all goods entrusted to the commission agent are, in fact, in the possession of the consignor. In other words, if the products are lost or damaged, the seller will bear responsibility for this. He will also have to compensate the exporter for everything associated with his oversight.
5. Product price. The owner of the goods has the right to personally determine its value. The main thing is that the numbers specified in the contract correspond to those that appear on the invoice for the products. In turn, the seller who has received the goods for sale has the right to change its price upward for his own material benefit.
6. Consignor's remuneration. This paragraph specifies how the amount that the commission agent will receive for his services will be calculated. We have already discussed above what options for calculating remuneration are possible in practice.
7. Payment order. This clause of the contract specifies the time frame within which the commission agent is obliged to transfer money to the exporter for the products sold by him.
8. Features of the delivery of goods. This clause specifies the volume of products prepared for sale, as well as the location of its further storage and the timing of transportation to the seller’s warehouse.
9. sides This part of the document lists the penalties that will be applied to each of the parties to the transaction in the event of failure to fulfill their contractual obligations.
10. Validity of the contract. This paragraph specifies the time frame during which a specific document will be considered relevant and valid.
11. Conclusion. This item is optional. It is provided in case one of the parties to the transaction wishes to negotiate additional terms of the agreement not mentioned in any of the previous parts of the agreement.

On the rights and obligations of the parties

Responsibility is on every side

The obligations that the consignor and consignee undertake when concluding their transaction may vary significantly, depending on many circumstances. Therefore, in this part of the article we will list only those provisions that are usually indicated in a standard consignment agreement. Thus, by agreeing to the described transaction, the consignor undertakes:

1. ensure delivery of goods for their subsequent sale within a time period clearly agreed with the seller;
2. provide everything required licenses or certificates for their products;
3. provide the seller with full consulting support; supply it with the methodological and advertising materials necessary for the successful sale of goods.

At the same time, the mentioned party to the contract also has some undeniable rights. In particular, we are talking about the possibility of revising the minimum cost of products sold during the transaction. The exporter also reserves the right to change the terms of delivery of the goods if they have been subjected to some modifications or updates. Naturally, the seller must be notified of this in advance.

However, for his part, the commission agent also bears some obligations to the product supplier. They are as follows. The seller must:

1. do everything in his power to ensure the smooth delivery of goods to the storage location;
2. ensure the safety of the products entrusted to him;
3. provide the product owner with monthly reports on sales and available product inventory;
4. provide assistance to the consignor in matters such as reconciliation of financial statements and verification of the actual condition of the goods;
5. timely transfer the proceeds for the sold funds to the consignor’s account.

Expert lawyer's opinion:

The agreement has a fancy name, but there is nothing special about it. A regular supply contract with elements of other contracts. For a businessman, especially one with a good reputation and experience, it is only a tool for doing business. But for a novice businessman, getting such an agreement is an opportunity for a successful start.

Its main difference from other commercial contracts is the deferred payment for the delivered goods. Large retail chains They work under such conditions, they never use advance payment, only after the sale of the goods do they pay for it. Some draw up contracts in such a way that if the sale is not complete, then they return the remainder to the manufacturer. They also manage to collect a penalty.

As a rule, an experienced lawyer does not have any problems in drawing up contracts. All difficulties are in the process of negotiations, it is difficult to reach an agreement. Although this problem applies to all commercial contracts.

This video will show you how to receive goods for sale: