Consignment Sale & Retail Inventory Placement Agreement

Consignment Sale & Retail Inventory Placement Agreement: a practical guide

A Consignment Sale & Retail Inventory Placement Agreement records the terms for placing goods with a retailer or seller who will try to sell them for the owner. It describes how the goods may be sold, how the parties will account for sales, and what happens to unsold or damaged items.

What it's for

People use this agreement when an owner gives goods to a shop, dealer, gallery, or other seller to display or sell, while the owner expects to receive the sale proceeds less an agreed fee or commission. It can help both sides keep a written record of who owns the goods, who may set or change prices, and when money and unsold items must be returned.

The parties should agree on the goods covered, the sale process, payment calculations, costs, loss or damage responsibilities, and how either side can end the arrangement. Describe the items, prices, and arrangements clearly, and use “Additional Terms & Provisions” for anything the form's fields don't cover.

Who uses it

• A vehicle owner placing a vehicle with a dealer for sale.
• An artist or maker placing work or products with a shop or gallery.
• A small business supplying goods to a retailer that will sell them for the supplier.
• A retailer or dealer accepting goods from an owner for display and sale.
• Two businesses arranging temporary placement of inventory without an outright purchase.

Terms to decide on

Goods and ownership

Identify each item clearly, including any distinguishing features, condition, and quantity. State who owns the goods while they are on display and whether the seller may transfer ownership to a buyer only through a completed sale.

Permission and sales process

Describe where and how the goods may be displayed or advertised, who may negotiate with buyers, and who must approve a sale. State whether the seller may offer discounts or accept trade-ins, installment payments, or other forms of payment.

Price and seller compensation

Set out the minimum or asking price, any permitted price changes, and the seller’s commission or fee. Explain how the parties will calculate the owner’s share, including which agreed costs, if any, may be deducted.

Records and payment

Say what sales and expense records the seller will provide and when the seller will send the owner’s share. Specify how the parties will handle deposits, refunds, buyer payment problems, and any amount still owed.

Care, loss, and damage

State how the goods must be stored, handled, and protected, and who is responsible if they are lost, stolen, or damaged. Identify any insurance the parties have agreed to arrange, without assuming that either party already has coverage.

Term and return of goods

Set out when the placement begins, how either side may end it, and how the goods will be collected or returned. Include who arranges and pays for transport and how the parties will record the items returned.

Common mistakes

• Listing goods too generally makes it hard to tell what was placed with the seller. Attach or refer to an inventory with identifying details and condition notes, and have both sides confirm it.
• Leaving discount authority unclear can lead to disagreement about a sale price. Record who may approve a discount and how approval will be given.
• Stating a commission without explaining deductions can cause disputes over the owner’s payout. List permitted costs and say whether they come out before or after the commission is calculated.
• Failing to set a reporting and payment process can leave the owner unsure whether an item sold or when money is due. State what sales information will be shared and when.
• Assuming one party automatically covers loss or damage can create an unexpected gap. Discuss custody, care, and insurance directly, then put the agreed responsibilities in writing.
• Ending the arrangement without planning the return can leave goods in the seller’s possession. Decide how collection, transport, and a final account will be handled.

Before you sign

• Match the written inventory to the goods being handed over, and record their condition.
• Confirm the owner’s name and the seller’s name, and check that each signer can act for that person or business.
• Read the price, discount, commission, and deduction terms together to confirm the payout calculation is clear.
• Agree on how the seller will report sales, receive buyer payments, and send the owner’s share.
• Set out care, loss, damage, insurance, and return arrangements in “Additional Terms & Provisions” if needed.
• Check that the end date or termination process gives both sides a clear way to close the arrangement.
• Check local rules for signatures, witnesses, notarization, registration, notice periods, or required wording where the agreement will be used, or ask a qualified lawyer if much is at stake.