What is a consignment in logistics?

In logistics, a consignment refers to a shipment of goods that is sent from one party (the consignor) to another (the consignee) for sale, distribution, or storage. The consignor retains ownership of the goods until they are sold or otherwise disposed of by the consignee. This arrangement allows businesses to manage inventory more efficiently and reduce financial risk, as the consignee typically pays for the goods only after they are sold. Consignment agreements can vary in terms of terms, responsibilities, and payment structures.