What does "consignee" refer to in a consignment arrangement?

In a consignment arrangement, the term "consignee" refers to the person or entity who sells goods on behalf of the consignor. The consignor is the one who owns the goods and transfers possession of them to the consignee for the purpose of selling. The consignee does not own the goods; instead, they act as an agent to facilitate the sale. They are responsible for marketing and selling the goods while the consignor retains ownership until the items are sold. This arrangement allows consignors to reach a broader market without needing to handle the sales process directly.

Additionally, the consignee usually receives a commission or fee for their services, which incentivizes them to sell the goods effectively. This structure benefits both parties, as the consignor can potentially sell more items without upfront costs, while the consignee can earn revenue from sales without investing in inventory.