Retail Store Consignment Contracts

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Retail store consignment contracts are agreements between a consignor and a consignee, in which the consignor allows the consignee to display and sell their merchandise on a commission basis. This arrangement is commonly used by small businesses and artists who do not have the resources to open their own store.

However, before entering into such an agreement, it is essential to understand the terms and conditions of the contract. Here are some considerations to keep in mind:

Commission Rate

The commission rate, which is the percentage of the sale that the consignee takes as a fee, should be clearly stated in the contract. The standard rate for most retail stores is around 30 to 40 percent. However, some consignees may try to negotiate a higher rate, so it is essential to read the fine print before signing.


Many consignees require exclusivity, which means that the consignor cannot sell similar merchandise to any other stores or online marketplaces. This condition can limit the consignor`s ability to sell their products, so it is important to consider the potential consequences before agreeing to exclusivity.

Duration of Contract

The duration of the contract should be specified in the agreement, and it can range from a few weeks to several months. The consignor should consider the time frame, as well as the possibility of renewing the contract, before signing.

Delivery and Pickup

The terms of delivering and retrieving merchandise should also be clearly stated in the contract. The consignee should provide detailed instructions on how to package and transport the goods, as well as the deadline for delivery. Additionally, the terms for retrieving the unsold goods should be spelled out.


The contract should also specify who is responsible for any damage, loss, or theft of the merchandise. Most consignment agreements place the burden of liability on the consignor, so it is important to take precautions to protect the merchandise while it is on display.

In conclusion, retail store consignment contracts can be a mutually beneficial arrangement for both consignors and consignees. However, it is essential to carefully review the terms and conditions of the contract before signing to ensure that both parties are protected and satisfied.