January 16, 2023

Consignee Vs. Consignor- What Is The Difference?

Do you ship products to clients as an eCommerce business? Whether you're just starting or are a long-time veteran of the industry, it's essential to know your consignees from your consignors. In this blog post, we'll break down the differences between these two terms so that you can better understand who is shipping and receiving your goods. It may seem confusing at first but don't worry - by the end of this post; you'll be an expert in navigating consignment logistics.

What Is A Consignor?

Consignor means the owner/sender of goods, which it has despatched to a consignee to be offered to a third party.

What Is A Consignee?

Consignee means the person who is the recipient of products/goods shipped to it by a consignor. The consignee is responsible for promoting the goods to a third party, after which the consignee will pay the consignor and retains a commission.

Comparing A Consignor And Consignee

The consignment method entails sending items from a consignor to a consignee. The consignee is tasked with then promoting the goods to an impartial third party. Until the remaining sale occurs, the consignor keeps possession of the goods. For example, an artist has an agreement with a gallery to promote his paintings. The artist is the consignor, and then the gallery is the consignee. When the gallery sells an artwork, possession transfers from the artist to the client of the painting. The consumer pays the gallery for the painting, the gallery makes its commission, and then forwards the last amount to the artist. This consequences in the following variations between the two entities:

  • When Shipping documents. The shipper is the consignor, and the consignee is the recipient.

  • Ownership. The consignor is the preliminary proprietor of the goods, while the consignee can also honestly be an agent, now not sincerely taking ownership of the goods. With this capability, the consignor continues a report of consigned stock on its books till the goods are ultimately sold to a third party.

  • Payment. The consignor gets the title to the goods until the consignee receives the compensation.

What Is Consignment?

Consignment is a retail system where a safe proprietor concurs to promote someone else's products in their store. The product owner still owns the merchandise until it's sold, and the keep receives a share of the sale price. 

How does Consignment Work?

Consignment is a process by which someone agrees to sell items on behalf of the consignor and receive a commission on the sale. In other words, you give away your stuff and hope somebody buys it.

The consignment process usually works like this: You take your stuff to a store specializing in selling consigned items. The store will appraise or accept your property and give you a price. If you agree to the price, the store will put your things on display and wait for somebody to buy them. When they do, you get paid by the store, and the store keeps its commission. If your things sell after a specific time, the store may offer to take them back, or you can take them back yourself. 

Consignment can be a great way to make extra money if you have items in good condition and desirable. It can also help you clear out your house or storage unit without having to go through the hassle of holding a yard sale or trying to find buyers online. However, there is always some risk involved when consigning items, as the store may not be able to sell your items, and you won't get paid for them. Therefore, it's essential to understand the terms of any consignment agreement before entering into one. Additionally, consignment stores usually charge high commission fees, so it's essential to know the fee structure upfront. Finally, try visiting different consignment stores to find one that has the best terms, price appraisal, and commission rate.

Related: Supplies Vs. Inventory: What Is The Difference?

Pros And Cons Of Being A Consignee Or A Consignor

Pros of Being a Consignee

- A consignee can purchase goods in bulk at a discounted rate, which helps reduce overall costs. 

- It can benefit both the seller and buyer as it allows them to collaborate to achieve mutual goals. 

- It can also provide an easy way to access new markets, allowing consignees to expand their business with minimal effort. 

- By allowing long-term agreements, the consignment relationship can become financially beneficial. 

- The risk associated with carrying inventory is reduced as the consignee only pays for the goods when they are sold. 

Cons of Being a Consignee

- The consignee is responsible for the cost of goods and may have to absorb a loss if they cannot sell them. 

- There can be delays in payment from buyers, which could leave the consignee unable to pay the supplier on time. 

- By sharing ownership of an item with a supplier, the consignee has limited control over pricing and marketing strategies. 

- It can be challenging to maintain accurate records and communication between both parties when dealing with large quantities of goods. 

Pros of Being a Consignor

- As the owner of the goods sold, the consignor retains complete control over pricing and other sales processes. 

- The consignor has the potential to make more enormous profits over time due to the lack of upfront costs and shared risk. 

- Consignment relationships can establish trust between buyers and sellers, allowing for a more secure business environment. 

- It can provide access to new markets that may otherwise be inaccessible due to financial barriers or other limitations. 

Cons of Being a Consignor:

- As the owner of the goods, the consignor may have limited ability to recoup losses if they are not sold. 

- There is no guarantee that goods will be sold promptly, which could lead to financial strain on the consignor. 

- Dealing with multiple consignees can be difficult and time-consuming, as communication between parties must be maintained to keep track of inventory. 

- The consignor may have to absorb any additional costs associated with shipping and delivery.


In summary, understanding the differences between a consignee and a consignor is essential if you want to ensure your goods are shipped to the right people. Knowing who's responsible for what guarantees their safety and accuracy when they reach their destination. To avoid any miscommunication or transactions, it's best to be well-informed and to always double-check with both parties to ensure that everything is taken care of correctly. With the correct information and tools, tracking requests and managing invoices and projects becomes a breeze. That's why we here at Conveyr have developed tools that enable 3PLs to compete and win new business! If you're looking for an effective way to manage shipments, you can count on us. We've got your back, so you don't have to worry about losing sight of those all-important components of your eCommerce business!

Recommended: Inbound Vs. Outbound Logistics: What's The Difference?

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