eBay Consignment Agreements, Contracts and Inventory Forms
This is the 4th in a series of articles about eBay consignment. In the first article we covered some Tips for Starting an eBay Consignment Business. The second covered eBay Consignment fees. The third explained Signing Up People For Your eBay Consignment Services. This article discusses consignment agreements, contracts, and inventory forms.
Owner/Agent NOT Consignee/Consignor
I use the words owner and agent in my consignment agreements rather than consignee and consignor. I do this because it's easier to understand. So in the following discussion when I talk about the agent, I am talking about the eBay consignment business. When I use the word owner I mean the person who owns the item you're selling on eBay.
Another reason to use the words owner and agent in your contracts is residents of some states need an auctioneer's license to do consignment. By using the words owner and agent, you can avoid the need for a license in all but the harshest states.
Why An eBay Consignment Agreement?
Selling on consignment requires an agreement because it protects you in the event of problems. I've had owners try to renegotiate terms after I sold their items on eBay.
Before I started using a contract and taking possession of items, I had someone refuse to sell his item after the auction ended. I could have sued him, but without a written agreement it would have just been my word against his.
The most important reason for having a written consignment agreement is it explains your contract with the owner. It explains the owner's responsibility- they give you the item. It explains your responsibility as his agent- after you've been paid by the purchaser you will give the owner his money less your consignment fees.
What To Include In A Consignment Contract
Your agreement must include a ownership statement. This protects you from legal problems if the owner doesn't really own the item you sell. I've never been accused of selling stolen items on consignment, but have purchased stolen goods for resale. It's a major hassle when the police contact you. A signed statement from the person claiming to be the owner will lower your hassles greatly.
Another important thing to put in the contract is that you are taking the owner's word for what the item is. Say someone gives you something and says it is a 1910 cast iron bank. You list it and sell it as a 1910 cast iron bank.
After getting the bank, the buyer complains that it is actually a 1995 cast iron bank someone's made to look old. You will refund the buyer's money, and then return the item to the owner.
This brings up an other thing that must be included in your consignment agreement. You must have language in the contract saying that no money will be given to the owner until the buyer has notified you that they have received the item and are happy with it.
The consignment contract also explains what happens in case of damage or theft of the items while in your possession, and what happens if the reserve is not met. And finally it states you are acting as an agent of the owner in selling the items.
eBay Consignment Inventory Forms
When taking multiple items from a single owner you'll use an inventory form along with the consignment contract. The contract refers to the list of items on the inventory form.
Your consignment inventory form is just a place for you to list the items you take from an owner. It has columns containing a description of the item, the price realized, research and listing fees, starting price or reserve, and the eBay item number, or tracking number you use.
My inventory forms also have an area at the bottom to figure out how much the owner gets and for the owner to sign when I pay him.
My consignment package comes with a sample contract and a sample inventory form. The package also explains how to find and sign up owners for your service.
In eBay Trading Assistant Tips you'll learn why you should become a trading assistant, and how to set up your account.
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