Consignment is a type of arrangement in which an owner gives a seller an item to be sold. However, as long as the item is not yet sold, it is still considered property of the owner. Therefore, if the owner changes his mind about selling the item, he may take it back at any time.

At the same time, though, the owner is aware of that there is a certain amount of risk in handing the item over to the seller for a certain period of time. If the owner is very concerned about this, he may ask that certain provisions be included in his agreement with the seller, in order to ensure protection of the item from damages and other risks.

Once the sale has been completed, the seller then hands over the payment to the owner, which is less than the amount that the item was sold for. The difference is the fee paid to the seller for the services rendered. This is often referred to as a commission.

The consignment system offers advantages to owners of items who would like to have them sold. For one thing, not all owners have the time to bring their item out into the market. They may also not have very good resources or connections which could help them gain more exposure for their products. Letting a seller take over can certainly save them money, time, and energy.

On the other hand, sellers also stand to benefit. After all, they are able to generate income without going through the trouble of creating or finding the product. They are also free from the burden of finding capital for building a shop or buying items to be sold.