A consignment agreement covers the split (consignment shops typically keep 40–60%; galleries 30–50%; dealers of high-value goods less), pricing authority and markdown schedules (automatic discounts at 30/60/90 days are standard in resale), title remaining with the consignor until sale, risk of loss and insurance while in the shop's custody, payout timing (within 15–30 days of sale), the consignment term with unsold-item terms (reclaim, donate, or shop purchase), inventory documentation with itemized receipts, and UCC Article 9 considerations — consignors of significant goods can file a UCC-1 to protect against the shop's creditors.
Consignment Agreement Template
Reviewed by the Agiled editorial teamUpdated June 2026
Consignment splits one transaction's risk between two parties: the owner keeps title (and the risk of never selling); the shop provides the storefront (and...
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CONSIGNMENT AGREEMENT
This Consignment Agreement ("Agreement") is entered into as of _______, 20 ("Effective Date"), by and between:
Consignor: ________________________, with a mailing address of ________________________ ("Consignor");
Consignee: ________________________, with a business address of ________________________ ("Consignee").
Consignor and Consignee are collectively referred to as the "Parties."
RECITALS
WHEREAS, Consignor is the owner of certain goods and desires to place them with Consignee for sale to the public; and WHEREAS, Consignee operates a retail establishment and is willing to display and sell Consignor's goods on a consignment basis;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree as follows:
1. Consigned Goods. Consignor shall deliver to Consignee the goods described in Schedule A attached hereto (the "Goods"). Each delivery shall be documented with a written receipt signed by both Parties listing the items delivered, their descriptions, quantities, and agreed values.
2. Ownership and Title. Title to the Goods shall remain with Consignor at all times until sold to a third-party buyer. Consignee shall have no ownership interest in the Goods. The Goods shall not be subject to the claims of Consignee's creditors. Consignor may file a UCC-1 financing statement to perfect its security interest in the Goods, and Consignee shall cooperate with such filing.
3. Pricing. The retail price for each item shall be as set forth in Schedule A, or as otherwise agreed in writing by the Parties. Consignee shall not sell any item below the minimum price specified by Consignor without Consignor's prior written approval. Consignee may offer discounts of up to __________% without Consignor's approval.
4. Commission. Consignee shall retain a commission of __________% of the gross sale price of each item sold (the "Commission"). The remaining __________% shall be remitted to Consignor as described in Section 5.
5. Payment Terms. Consignee shall provide Consignor with a written sales report and payment of all amounts due on a [weekly/bi-weekly/monthly] basis, no later than __________ days after the end of each reporting period. Payment shall be made by [check/electronic transfer] to ________________________. The sales report shall include a list of items sold, the sale price, the Commission retained, and the net amount due to Consignor.
6. Display and Marketing. Consignee shall display the Goods in a prominent and professional manner within its retail space. Consignee shall use reasonable efforts to promote and sell the Goods. Consignee shall not alter, modify, or damage the Goods without Consignor's prior written consent.
7. Care and Custody. Consignee shall exercise reasonable care in handling, storing, and displaying the Goods. Consignee shall keep the Goods in a secure location and shall protect them from damage, theft, and deterioration. Consignee shall not remove the Goods from its business premises without Consignor's prior written consent.
8. Insurance. Consignee shall maintain insurance coverage sufficient to cover the full agreed value of the Goods against loss, damage, theft, and fire while the Goods are in Consignee's possession. Consignee shall name Consignor as a loss payee on such insurance policy and shall provide Consignor with a certificate of insurance upon request.
9. Risk of Loss. Risk of loss, damage, or destruction of the Goods shall pass to Consignee upon delivery and shall remain with Consignee until the Goods are sold to a buyer or returned to Consignor. If any Goods are lost, damaged, or stolen while in Consignee's possession, Consignee shall promptly notify Consignor and shall pay Consignor the agreed value of the affected Goods within __________ days.
10. Inventory and Accounting. Consignee shall maintain accurate records of all consigned Goods, including items received, items sold, items returned, and items remaining in inventory. Consignor shall have the right to inspect the Goods and Consignee's records at any reasonable time upon __________ days' written notice.
11. Return of Unsold Goods. Consignor may request the return of any unsold Goods at any time by providing __________ days' written notice. Consignee shall return the Goods in the same condition as received, reasonable wear from display excepted, at [Consignor's/Consignee's] expense.
12. Term and Termination. This Agreement shall commence on the Effective Date and shall continue for a period of __________ [months/years], unless terminated earlier. Either Party may terminate this Agreement by providing __________ days' written notice. Upon termination, Consignee shall return all unsold Goods to Consignor within __________ days and shall remit all outstanding payments within __________ days.
13. Confidentiality. The Parties shall treat the financial terms of this Agreement, including pricing, commission rates, and sales data, as confidential and shall not disclose such information to third parties without the other Party's prior written consent.
14. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of __________, including the Uniform Commercial Code as adopted in that state. Any disputes shall be resolved in the courts of __________ County.
15. Entire Agreement. This Agreement constitutes the entire agreement between the Parties regarding the consignment of the Goods and supersedes all prior negotiations and agreements. This Agreement may not be amended except in writing signed by both Parties.
16. Signatures.
Consignor: ________________________ Date: __________
Consignee: ________________________ Date: __________
Schedule A: Inventory of Consigned Goods
| Item Description | Quantity | Condition | Agreed Value | Minimum Retail Price |
|---|---|---|---|---|
- Shop's cut
- 40 – 60% resale; 30 – 50% galleries
- Markdowns
- 30/60/90-day schedule, typical
- Payout
- 15 – 30 days after sale
- Title
- Consignor's until sold
What your consignment agreement should cover
The inventory exhibit
Every item listed with description, condition, and agreed initial price — the itemized receipt both parties sign at intake. Photos for anything of value. The exhibit is the whole relationship's evidence base: without it, 'you never gave me that jacket' has no answer.
The split
The commission stated per category if needed: general resale shops keep 40–60%, galleries 30–50% of art sales, high-value dealers (watches, instruments, vehicles) often 10–25%. Tiered splits (better rates above price thresholds) reward consignors of premium goods.
Pricing authority and markdowns
Who sets the initial price (jointly, at intake), and the markdown schedule in advance: the resale standard is automatic reductions at intervals (e.g., 20% at 30 days, 40% at 60), with a floor price below which the shop must call. Surprise markdowns are the category's top dispute; the schedule pre-litigates it.
Title and the UCC layer
Title stays with the consignor until sale — and for significant consignments, the protective extra: a UCC-1 financing statement filed against the shop, because under UCC Article 9 a consignor who doesn't perfect can find their goods swept into the shop's bankruptcy as apparent inventory. Routine for art and high-value dealers; unknown to most casual consignors.
Risk of loss and insurance
Who bears theft, fire, and damage while goods sit in the shop: the professional answer is the shop, at stated insured values (the inventory exhibit's prices), with the shop's policy covering consigned goods explicitly — many commercial policies exclude them unless endorsed. 'Not responsible for loss' shops are asking consignors to insure a stranger's premises.
Payout terms
Proceeds paid within 15–30 days of sale (monthly settlement cycles are common), itemized statements showing what sold and at what price, and — the clause that matters in a shaky-shop scenario — sale proceeds held in trust for the consignor, not commingled into operating cash.
The consignment term
60–120 days typical for resale (art consignments run 6–12 months), with the end-of-term options stated: consignor reclaims (pickup window), shop buys at a stated discount, items donate (with receipt), or the term renews by agreement. Unclaimed items past a final deadline follow the abandonment terms.
Care, display, and returns
The shop's duty of reasonable care, display standards if negotiated (the gallery wall versus the back rack), the shop's return policy applied to consigned goods (a customer return un-sells the item — the payout reverses or waits out the return window), and no lending, personal use, or off-site removal.
Withdrawal rights
The consignor may reclaim unsold items before term's end with notice (48–72 hours), possibly with an early-withdrawal fee if the shop invested in prep/photography — and the shop may return unsalable items early with notice. Liquidity both directions keeps the relationship voluntary.
Authenticity and ownership warranties
The consignor warrants they own the goods free of liens and that items are authentic as described — the shop's protection against selling stolen or counterfeit goods, with indemnity if the warranty fails. Shops in branded-goods resale add their own authentication step and say whose call is final.
Typical consignment terms (U.S., 2026)
| Item | Typical range | Notes |
|---|---|---|
| Resale shop commission | 40 – 60% | Shop's share |
| Gallery commission | 30 – 50% | Of art sales |
| High-value dealer | 10 – 25% | Watches, instruments, autos |
| Consignment term | 60 – 120 days | Art: 6 – 12 months |
| Markdown schedule | 20% / 40% at 30 / 60 days | Floor price protected |
| Payout timing | 15 – 30 days post-sale | Itemized statements |
| UCC-1 filing | ~$10 – $40 | High-value protection |
Splits and terms vary by category and market. Several states have consignment statutes — notably for fine art, where artist-consignor protections (trust funds, creditor shields) are codified.
How consignment agreements work in practice
The clothing consignment
Forty pieces dropped at a resale boutique: the intake ritual is the contract in action — items inspected and accepted (or declined) per the shop's standards, the inventory receipt itemized and signed, prices set against the shop's comps, and the markdown schedule acknowledged. The 90-day arc runs itself: sales settle monthly, the 30/60-day markdowns happen per the schedule (no phone calls, no surprises), and at term's end the pickup window opens for the unsold remainder — with the donate-by-default option for consignors who'd rather not return. The disputes this prevents are exactly the ones casual consignment generates: phantom items, surprise discounts, and payouts on shop time.
The gallery and the artist
Art consignment carries its own law: many states (New York and California prominently) make sale proceeds statutory trust funds for the artist and shield consigned art from gallery creditors — protections the agreement should recite, not replace. The terms that matter beyond the split (30–50% to the gallery): the price list as an exhibit with no discounts beyond a stated courtesy range (the gallery's 10% collector discount comes from whose share — decided now), payout within the statutory window, insurance at retail-minus-commission values, loss/damage valuation pre-agreed, and the exhibition commitments (wall time, the opening, inclusion in fairs) that are the artist's actual consideration for the percentage.
The shop that went under
The consignor's nightmare: the boutique closes overnight, creditors claim everything inside, and the consignor's goods sit in the inventory the bank's lien covers. The protections that decide the outcome, all arranged beforehand: the signed inventory exhibit proving which goods were consigned (not the shop's), the agreement's title-retention and trust-proceeds language, the UCC-1 filing that perfected the consignor's interest against the shop's secured creditors (the $20 filing that outranks the bank), and — for art in statute states — the consignment statute's automatic shield. The consignor who walked in with a handshake stands in the unsecured-creditor line; the one with the paperwork takes their goods home.
Mistakes that weaken a consignment agreement
No itemized intake receipt
Consignment without an inventory exhibit is a memory contest scored by whoever holds the goods. Every item, described and priced, signed by both — photos for anything that matters.
Open-ended pricing authority
A shop free to discount at will is spending the consignor's money on its own foot traffic. The markdown schedule plus a floor price converts discounting from a betrayal into a calendar.
Ignoring the shop's insurance
Many commercial policies exclude consigned goods unless endorsed — meaning the fire that closes the shop also vaporizes the consignor's inventory, uninsured. Ask the question; put the answer in the agreement.
Skipping the UCC filing on serious goods
Under Article 9, unperfected consigned inventory can feed the shop's creditors in a collapse. For consignments worth real money, the UCC-1 costs less than lunch and outranks the bank.
No end-of-term plan
Unsold goods with no reclaim deadline become the shop's storage problem and then, informally, its property. The term, the pickup window, and the donate/purchase defaults — written at intake.
How to use this template
- 01
Download the consignment agreement template in Word or PDF.
- 02
Build the inventory exhibit: items, condition, photos, and agreed prices.
- 03
Set the split, the markdown schedule, and the floor-price call requirement.
- 04
Confirm the shop's insurance covers consigned goods at stated values.
- 05
Set payout timing with itemized statements — and file a UCC-1 for high-value goods.
- 06
State the term and end-of-term options, then sign at intake.
Skip this template if…
- Wholesale with return rights — sale-or-return inventory between businesses runs on different UCC mechanics and a supply agreement.
- Online marketplace selling — platform terms of service govern eBay/Poshmark-style sales; there's no negotiated consignment relationship.
FAQs
How does consignment work?
The owner (consignor) leaves goods with a shop (consignee) that sells them for a commission — typically 40–60% for resale shops, 30–50% for galleries, 10–25% for high-value dealers. Title stays with the owner until sale; the shop pays out within 15–30 days of selling; unsold items return, donate, or renew at term's end per the agreement.
What percentage do consignment shops take?
General resale: 40–60% of the sale price. Galleries: 30–50% of art sales. Specialist dealers in watches, instruments, and vehicles: often 10–25%, reflecting higher prices per item. Tiered splits that improve the consignor's share above price thresholds are common for premium goods — worth negotiating on anything significant.
Who is responsible if consigned items are stolen or damaged?
Whoever the agreement says — and the professional answer is the shop, at the inventory exhibit's stated values, with the shop's commercial policy explicitly endorsed to cover consigned goods (many exclude them by default). A shop disclaiming all loss responsibility is asking consignors to bear the risk of premises they don't control.
Can a consignment shop lower my prices?
Only per the agreed markdown schedule — the resale standard is automatic reductions at intervals (e.g., 20% at 30 days, 40% at 60) with a floor price below which the shop must get consent. Pricing authority left open-ended is the category's most common dispute; the schedule, agreed at intake, is the fix.
What happens to unsold consignment items?
The end-of-term options stated in the agreement: the consignor reclaims within a pickup window, the shop purchases at a stated discount, items donate to a named charity (with receipt), or the term renews by agreement. Items unclaimed past a final deadline follow the abandonment clause — which is why the deadline and the notice procedure belong in writing.
What is a UCC filing in consignment?
A UCC-1 financing statement perfecting the consignor's interest in goods held by the shop — protection against the scenario where the shop fails and its secured creditors claim everything on the premises as inventory collateral. It costs roughly $10–$40 to file and is routine practice for art and high-value consignments; fine-art consignors in several states also get statutory creditor shields.
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