Difference Between Consignment And Sales

Difference Between Consignment And Sales

The main dissimilarities or difference between consignment and sales can be pointed out as follows:

1. Meaning

Consignment: Business activity where consignee agrees to pay a consignor after the sale of goods.

Sales: Exchange of goods or property for a certain price.

2. Ownership Of Goods

Consignment: Remains with the consignor until goods are sold

Sales: Ownership of goods will be transferred to the consumer after sales.

3. Members Or Parties Involved

Consignment: Consignor and consignee

Sales: Seller and buyer

4. Returning Back

Consignment: Unsold goods can be returned by the consignee to the consignor

Sales: Sold goods cannot be returned

5. Risk Bearing

Consignment: Consignor bears all the risk involved in consignment

Sales: Risk should be borne by buyer after purchasing the product.

6. Expenses

Consignment: Borne by consignor

Sales : Borne by seller

7. Profit

Consignment: Profit is enjoyed by consignor. Consignee gets commission

Sales: Profit is enjoyed by seller solely

   

Also Read: 

Difference Between Joint Venture And Consignment

8. Sales Order

Consignment: Not required

Sales: Required

9. Invoice

Consignment: Proforma invoice is prepared

Sales: Sales invoice is prepared

Consignment Vs Sales (Comparison Chart)

Basis For Difference	Consignment	Sales
Introduction	Trading arrangement where consignee pays to a consignor after the sales	Exchange of goods, properties or services for a certain price
Ownership Of Goods	Remains with consignor	Transferred to customers
Parties Involved	Consignor and consignee	Seller and buyer
Return Back	Unsold goods can be returned	Cannot be returned
Risk Bearing	By consignor	By buyer
Expenses Borne By	Consignor	Seller
Profit Enjoyed By	Consignor	Seller
Sales Order	Not required	Required
Invoice Prepared	Proforma invoice	Sales invoice

I hope this post is helpful to understand the difference between consignment and sales and to make comparison between them.