CONSIGNMENT

Consignment basically a contract in which a

seller sends goods to a byer or reseller who
pays the seller only as and when the goods
are sold .The seller remains the owner of
the goods until they are paid for full and ,
after a certain period ,takes back the unsold
goods .Also called sale or return ,or goods
on consignment.
 PARTIES OF CONSIGNMET
SELLER OF THE GOODS RESELLER OF THE
CALLED CONSIGNER GOODS CALLED
CONSIGNEE

CONSIGNER CONSIGNEE
ADVANTAGES OF CONSIGNMENT
1.Business exposure increases .

2.cost effective method to expand business.

3.Manufacturers can sell the product even when there is no

demand in their areas.

4 . The consignee possess the goods with him for sale on behalf
and risk of the consigner.
CONSIGNMENT EXPENSES
When the goods are sent to on consignment , certain
expense are incurred called consignment expenses
.These expenses are incurred by the consignor as well
as by consignee. These expenses are of two types

1.Non recurring expenses

2. Recurring expenses
NON RECURRING EXPENSES:
Non recurring expenses are those expenses which are
incurred by the consigner to bring the goods to their
present condition & location .
1. NON RECURRING EXPENSES INCURRED BY
CONSIGNOR
cartage ,freight ,packing expenses ,dock dues
,landing charges.

2.NON RECURRING EXPENSES INCURRED BY

CONSIGNEE
RECURRING EXPENSES
Recurring expenses are those expenses which are
incurred after the goods have reached consignee
place.
1. Recurring expenses incurred by consignor
bank charges or commission for discounting bills,
drafts and cheques received from consignee for
payment of sale proceeds.
expenses incurred on damaged goods received back
2. Recurring expenses incurred by consignee

(a) Godawn rent

(b)Insurance of goods
(c)Carriage on sales
(d)Advertising
(e)Brokerage or commission on sales
(f)Salary to salesman
(g)Expenses on goods return
(h)Expenses on goods damaged
CONSIGNEE COMMISSION
1. Normal commission : this commission is paid to the consignee
as a return for the sale of goods by him on behalf of consignor.
Ordinary commission is generally calculated as a fixed
percentage of total sales as per terms laid dawn by the
consignor.
2. Del credere commission : it is that commission which is given
to consignee for guarantee credit sale.it is calculated on total
sales unless otherwise stated in the question. This commission
given for taking the guarantee of credit sale
3. Over riding commission : it is that commission which is given
for selling the goods at a price higher than the normal selling
price is known as surplus price. It is calculated on surplus
price at given rate.
BASIS CONSIGNMENT SALE
NAME OF 1. CONSIGNOR 1. SELLER
2. CONSIGNEE 2. BUYER
PARTIES

RELATIONS PRINCIPLE AND AGENT DEBTOR AND CREDITOR

HIP

RETURN OF CONSIGNEE HAS A RIGHT THE GOODS IN IN CASE OF SALE GOODS ONE FOR CAN
CASE HE IS NOT IN POSSESSION TO SELL NOT BE RETURN TO THE SELLER
GOODS THEM.

AFTER IN CONSIGNMENT AFTER DELIVERY IN CASE OF SALE AFTER DELIVERY

EPENSES ARE BORN BY CONSIGNOR EXPENSE ARE BORN BY BUYER
DELIVERY THOSE PAID BY CONSIGNEE
EXPENSE
TRANSFER IN CASE OF CONSIGNMENT RISK IS NOT IN CASE OF SALE RISK IS TRANSFER
TRANSFERRED ANY LOSS OR DAMAGES FROM SELLER TO BUYER ANY LOSS OR
OF RISK TO THE GOODS WILL BE BORN BY DAMAGES TO THE GOODS WILL BE BORN
CONSIGNOR BY BUYER.
Thank
you SUBMITTED TO:
DR.MANJIT SINGH
SUMITTED BY
TANVI