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Consignment definition

What does it mean when someone wants to place their products in my store on consignment? 
When you accept consigned goods (or products owned by someone else) to be offered for sale in your business, you agree to pay the owner some portion of the sale proceeds (or some other fee) only when the goods are actually sold. Here are some things to keep in mind before you accept consigned goods:

- You may be responsibility for any loss or damage to the items. Does your insurance coverage include this kind of exposure?

- You can't use consigned items as collateral, and creditors cannot use the items to satisfy your debts.

- You will be expected to pay the consignor their money as soon as you receive collected funds from the sale.

- Make sure your agreement is in writing before you take possession. 
Brain Trust contributor: Author of J.K. Lasser's Small Business Taxes 2007
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