What's a consignment agreement?

A consignment agreement is a long term agreement you create for the purchase of goods under a consignment arrangement with your supplier.

Consignment inventories consist of items that are in possession of one party (for example, customers, dealers, or agents) but remain the property of another party (for example, the manufacturer).

The consignment agreement carries the terms and conditions, details of the goods to be purchased on consignment from the supplier, and negotiated amounts. It does not indicate the delivery details, quantities, locations or dates for the consigned goods to be delivered. These details are specified on the consignment order issued against the consigned agreement.