Consignment Agreement Template

A consignment agreement is the document that defines the relationship between your store and each consignor. When something goes wrong — a dispute over a payout, a question about who can mark down an item — the agreement is what you both refer back to. Here's what to include and a template structure you can adapt.

Why put it in writing

Verbal consignment arrangements work until they don't. A signed agreement protects both parties and prevents the ambiguity that causes disputes. Consignors who've been doing this a while will expect to see one. New consignors will trust you more for having one.

What every consignment agreement should cover

1. Parties

Full legal names and contact details for both the store (consignee) and the consignor. If the consignor is a business, their trading name and registered entity.

2. Commission rate and split

State the exact percentage split and which base it applies to. Example: "The consignor receives 60% of the final sale price (after any applicable taxes are excluded). The store retains 40% as commission."

If the rate changes based on time on the floor (tiered rates), document each tier: e.g. 60% in months 1–2, 50% in months 3–4.

3. Pricing authority

Who sets the price, and who can change it. Common variations:

• Store sets prices based on consignor's suggested range
• Consignor sets price, store cannot change without notice
• Store can reduce price by up to X% after Y days without notice

This is one of the most common dispute points. Be explicit.

4. Payout schedule

How often are payouts made? Monthly, fortnightly, on request? What is the minimum payout threshold (e.g. payouts only processed if balance is over $20)? How is payment made — cash, bank transfer, store credit?

5. Consignment period

How long does the store hold items? What happens at the end of the period — are items returned, donated, or discarded? Does the consignor need to collect within a specific window?

6. Unsold items

Clearly state what happens if an item doesn't sell: the consignor collects within X days, or the store is authorised to donate/dispose. This prevents abandoned stock piling up and prevents disputes about who owns uncollected items.

7. Loss, damage, and theft

Is the store liable for items lost, damaged, or stolen while in their care? Most consignment agreements exclude liability, but this must be stated clearly. If you carry insurance that covers consigned items, note that.

8. Refunds and returns

If a customer returns a sold item, does the commission reverse? What is the consignor's entitlement — do they take the item back, or does it go back on the floor? State the store's refund policy and how it affects consignor earnings.

9. Termination

How does either party end the arrangement? Notice period? What happens to unsold items on termination?

Template structure

A basic consignment agreement typically runs 1–2 pages. The structure:

1. Header: "Consignment Agreement between [Store Name] and [Consignor Name]"
2. Date and parties
3. Commission and pricing (sections 2–3 above)
4. Payout terms (section 4)
5. Consignment period and unsold items (sections 5–6)
6. Risk and liability (section 7)
7. Refunds (section 8)
8. Termination (section 9)
9. Signatures: Both parties sign and date

Keep the language plain. Consignors aren't signing a commercial contract — they're agreeing to let you sell their things. The clearer the language, the fewer the disputes.

What to vary per consignor

The body of the agreement can be a standard template. The fields that differ per consignor — commission rate, agreed price ranges, any special terms — can be handled as a schedule or addendum attached to the standard document. This keeps your template consistent while accommodating individual arrangements.

Important note

This guide is practical, not legal advice. For a legally binding agreement appropriate to your jurisdiction, have a lawyer review your template. The structure above covers the operational essentials — a lawyer can ensure enforceability.