Difference Between Consignment And Sales

Consignment can not be treated as sales of goods. It is different from sales. The difference between consignment and sales are as follows:

1. Ownership

Consignment: The ownership of the goods remains with the consignor until sales is effected by the consignee.
Sales: The ownership of the goods immediately transferred to the buyer when sale is effected.

2. Relationship

Consignment: The relationship between the consignor and consignee are of principal and agent. Their relation ship are continued till terminated.
Sales: The relationship between the two parties are that of seller and buyer and they terminated as soon as payment is made and goods are delivered.

3. Expenses

Consignment: The expenses incurred by the consignee to execute sale and the expenses incurred by consignor to send the goods to the consignee, both are borne by the consignor.
Sales: Any expenses incurred after the sale is not borne by the seller.

4. Risk

Consignment: The risk of goods under consignment is always with the consignor.
Sales: When the sale is made the risk is transferred to the buyer.

5. Return Of Goods

Consignment: Consignee can return goods to the consignor since those are properties of consignor.
Sales: A buyer can not return goods unless the goods are found defective or damaged or the seller agrees to.

6. Statement

Consignment: For giving details about the goods sold and expenses incurred by him, consignee sends the account sales to consignor.
Sales: The buyer need not submit any account sales to the seller

7. Stock

Consignment: The unsold stock with the consignee will be treated as a stock of the consignor.
Sales: In case of sale, the buyer's unsold stock do not attract the seller.

8. Commission

Consignment: Commission is the main consideration of consignment. The consignee performs the selling activity only for commission.
Sales: Profit is the main consideration of sales.