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A Consignment Agreement lets you sell products through another business while keeping ownership until they're sold. Under German commercial law (Handelsgesetzbuch), the consignor (you) places goods with a consignee (usually a retailer), who displays and sells them to customers. The consignee earns a commission but doesn't buy the items outright.

These agreements are especially popular in German retail, art galleries, and luxury goods markets. They specify key details like commission rates, payment terms, and handling of unsold merchandise. The consignee must maintain detailed inventory records and follow strict German accounting rules for consignment goods, as they're technically managing someone else's property.

Use a Consignment Agreement when you want to test new products in the German market without the full risk of traditional wholesale. It's ideal for high-value items like artwork, designer fashion, or specialty equipment where upfront purchasing costs are prohibitive. This arrangement lets retailers showcase your products while you maintain ownership and control.

The agreement becomes essential when entering partnerships with German department stores, galleries, or boutiques that prefer consignment models. It protects both parties by clearly defining commission structures, handling procedures, and liability terms under German commercial law. Many suppliers choose this route during market entry or when launching premium product lines that require careful positioning.

• Standard Retail Consignment: Used in German department stores and boutiques, covering basic sales terms, commission rates, and merchandise handling.
• Art Gallery Agreements: Specialized terms for artwork valuation, insurance requirements, and exhibition rights under German cultural property laws.
• Luxury Goods Consignment: Enhanced security and liability provisions, detailed authentication procedures, and strict display requirements.
• Time-Limited Seasonal: Popular for fashion retailers, including specific duration terms and end-of-season handling procedures.
• Multi-Location Retail: Comprehensive agreements for chain stores, addressing inter-store transfers and centralized accounting requirements.

• Manufacturers/Suppliers: Create agreements to place their products in retail locations while maintaining ownership and control over pricing and presentation.
• Retail Stores: Accept and display consigned goods, earning commission on sales without upfront inventory investment.
• Art Galleries: Partner with artists to showcase and sell artwork under German cultural property regulations.
• Legal Counsel: Draft and review agreements to ensure compliance with German commercial law and protect client interests.
• Accountants: Track consignment inventory, sales commissions, and tax implications under German accounting standards.

• Basic Details: Gather complete business information for both consignor and consignee, including tax IDs and commercial registry numbers.
• Product Specifics: List items with detailed descriptions, values, and condition assessments per German commercial standards.
• Commission Structure: Define exact commission rates, payment terms, and VAT handling procedures.
• Timeline Planning: Set clear consignment periods, inventory review dates, and terms for unsold merchandise.
• Risk Management: Document insurance requirements, liability terms, and loss prevention measures.
• Operational Rules: Specify display requirements, pricing authority, and inventory reporting expectations.

• Party Details: Full legal names, addresses, and commercial registry numbers of consignor and consignee.
• Product Description: Detailed inventory list with values, conditions, and unique identifiers.
• Commission Terms: Clear percentage rates, payment schedules, and VAT handling under German tax law.
• Duration Clause: Specific start and end dates, renewal options, and termination conditions.
• Risk Allocation: Insurance requirements, liability limits, and loss responsibility per BGB standards.
• Operational Rules: Inventory management, reporting requirements, and sales procedures.
• Dispute Resolution: German jurisdiction clause and specific court of competence.

A Consignment Agreement differs significantly from an Agency Agreement in the German legal framework. While both involve one party selling goods on behalf of another, their core structures and responsibilities vary considerably.

• Ownership Structure: In consignment, the consignor maintains ownership until final sale. With an Agency Agreement, the agent never owns the goods but acts as a legal representative.
• Risk and Liability: Consignment retailers handle physical inventory and bear storage risks, while agents typically focus on securing sales without housing products.
• Commission Models: Consignment fees usually reflect storage and handling costs plus sales commission. Agency fees focus purely on sales performance.
• Legal Authority: Agents can often negotiate and bind their principals under German law (Handelsgesetzbuch), while consignees have limited authority to modify terms.