Difference Between Consignment And Sales

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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.

Related Topics
Concept And Meaning Of Consignment Of Goods
Terms Used In Accounting For Consignment Of Goods
Types Of Consignment Expenses
Concept And Types Of Commission In Consignment


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