The sending of goods by consignor to consignee through an agent. It is known as consignment. Now a days sale and purchase of goods increased. This is because of the expansion of markets and businesses. To avoid inconvenience and to avoid delay in sale and purchase. The person hire an agent on commission. The consigner sent goods to consignee. All the expenses are bearded by the consigner. Fixed commission is paid to consignee. Sometime del creder commission is also paid. This is because of the bearing risk of bad debts by the consignor.
When consignment is reached the consignee tells to consignor. Then amount is paid by bank overdraft or by online banking. There may b abnormal loss or normal loss occur. Both parties also take insurance policy. In case of loss of goods the insurance company covers the loss of customer. The calculation of abnormal loss is spread over the profit of selling of other goods.
In this way selling of goods is easy and consignor does not have to travel to other place or city or country to sell the goods.The consignor can either earn profit or loss. All the expenses like transportation ware house insurance and commission expenses are deducted from total sale and profit is to be finding out.