10 Tips on How to Write a Consignment Agreement
1. Make sure to take a picture of each item that is going to be on consignment. You want to take a picture of every item due to legal reasons.
2. Write up an consignment agree that includes terms in it and releases your company from any liability due to theft, fire, or any damage due to weather. You want to have the terms spelled out clearly and make them easy to understand.
3. You also need to include the commission percentage on the form that your company will receive. You need to list the names of the items on there and include the pictures with the form too. You want to list the price on there that the consigner wants to sell the items for each. You also need to include the percentage of money that the consigner will receive each month.
4. You need to list the date on the form and include the date of when the items are on consignment and when the consignment is suppose to end. This is important so that you and the consigner doesn’t get confused about any dates of consignment later on.
5. You need to also include the consignment agreement some sort of detailed statement regarding picking up any unsold items within 90 days. You can include the agreement that if the consigner doesn’t pick up any of their unsold items within 90 days after the end of the consignment then legally your company would own the products now.
6. You need to state in the agreement details regarding the consigners getting paid for the items sold. You need to let them know when and how often they are going to get paid. If they are going to get paid by check in the middle of the month then please say it. If the consignment checks always pay for work that are from the previous month then please mention it in the agreement.
7. If the commission is different depending upon the size of the item and which category that it is in then make sure to state the different amounts of commission. This is important so that the consigner doesn’t get confused.
8. Make sure to have three copies of the agreement that the consigner signs. You want one copy to give to the consigner and you want another copy to keep in the company records. The extra copy is there just in case your company needs it for court.
9. You need to have a lawyer look at the consignment agreement before you let consigners sign it. The attorney will be able to tell you if you need to change it or reword anything.
10. You need to have the consigners information on the agreement such as their telephone number, address, and any other necessary information. This is important to have so that you can get in contact with the consigner to inform about any sales.
