Consignment Form: Key Clauses For Australian Small Businesses

If you run a retail store, boutique, online marketplace, gallery, warehouse, repairer, or any business that sells (or holds) other people’s goods, you’ve probably dealt with consignment arrangements.

A consignment model can be a great way to grow your product range without paying upfront for stock. It can also help you test new suppliers, makers or brands with less risk.

But there’s a catch: consignment arrangements can get messy fast if you don’t clearly document what’s being consigned, who owns it, who wears the risk, and what happens if there’s a dispute.

That’s where a consignment form matters. Think of it as the “ground rules” document that protects both sides and stops misunderstandings before they turn into costly problems.

Below, we’ll break down what a consignment form is, what you should include, and why each clause matters in an Australian small business context.

What Is A Consignment Form (And When Do You Need One)?

A consignment form is a written document that records the details of goods being supplied by one party (the consignor) to another party (the consignee) for the purpose of sale, storage, display, repair, or distribution.

In most consignment models:

• The consignor keeps ownership of the goods until they’re sold to an end customer.
• The consignee holds the goods and sells them on the consignor’s behalf.
• After sale, the consignee pays the consignor the agreed amount (or remits proceeds less commission/fees).

You’re likely to need a consignment form if you:

• take stock from makers/suppliers and only pay once it sells
• sell second-hand goods on behalf of customers
• host pop-ups or shared retail where multiple vendors place stock in your store
• operate an online platform where vendors consign goods to your warehouse for fulfilment
• take goods in for resale after repair/refurbishment

Even if you have a broader agreement in place, a simple consignment form can act as the practical “transaction record” that confirms what was delivered and what rules apply for that specific batch of goods.

Why A Consignment Form Protects Your Business (Not Just The Consignor)

Some business owners treat a consignment form like admin paperwork. In practice, it’s often the difference between a straightforward arrangement and an expensive dispute.

For the consignee (the business holding/selling the goods), a consignment form can help you:

• avoid arguments about stock levels (what came in, what sold, what was returned)
• define who is responsible for loss or damage (including theft, breakage, water damage, fire, etc.)
• set payment timing so you’re not expected to pay before you’ve been paid by your customer
• control pricing and discounting rules, especially during promotions
• clarify commissions, fees and deductions (for example, merchant fees, refund costs, marketing fees, storage fees)
• reduce legal risk if there’s a customer complaint, warranty claim, refund request or alleged defect

It also signals professionalism. Suppliers and consignors are more likely to work with a business that has clear, consistent processes.

And because selling goods to customers engages the Australian Consumer Law (ACL), having a written consignment arrangement helps allocate responsibilities between you and the consignor (even though your obligations to the customer can’t simply be “signed away”). If you’re working through how guarantees, refunds and quality obligations work, Australian Consumer Law concepts like acceptable quality are a good place to start.

What To Include In A Consignment Form (The Practical Checklist)

There isn’t one “perfect” consignment form for every business. What you include should reflect how you actually operate, what you sell, and where the risk points are.

That said, most Australian small businesses should cover the following essentials.

1. Parties And Contact Details

Include full legal names and contact details for both parties, including:

• individual name or business name
• ABN/ACN where applicable
• address
• email and phone number

This might sound basic, but it matters when you need to issue notices, chase payments, or confirm who has authority to sign. If someone is signing for a company, it’s worth making sure they’re signing in the correct capacity (for example, as a director/secretary or an authorised representative) so the paperwork matches how the business operates.

2. Description Of Goods Being Consigned

Be specific. A consignment form should identify the goods clearly enough that there’s no confusion later.

For each item (or SKU/batch), include:

• item name/description
• quantity
• serial number or unique identifier (if applicable)
• condition at time of delivery (new, used, refurbished, with defects noted)
• recommended retail price (RRP) and/or agreed sale price

If you can, attach a stock list, invoice-style schedule, or photos (especially for higher value or one-of-a-kind items).

3. Ownership Of Goods (Title) And When It Transfers

This is a core point: who owns the goods while they’re in your possession?

A typical consignment arrangement says the consignor retains ownership until sale to an end customer. Your consignment form should state:

• that title remains with the consignor until sale (or another agreed trigger)
• what counts as a “sale” (for example, when payment is received, or when goods are delivered, or after return/cooling-off windows)
• what happens if the goods are returned by the customer (do they revert to consignment stock, who bears the cost, etc.)

This interacts with how you run your payments, refunds and accounting, so it’s worth getting this wording right.

4. Consignment Period And What Happens At The End

Set the timeframe. For example, goods are consigned for 30, 60, or 90 days, or until sold.

Then address end-of-term outcomes:

• unsold stock is returned to the consignor by a certain date
• unsold stock can be extended by agreement
• unsold stock can be discounted after a certain period (subject to approval rules)
• storage/handling fees may apply if stock isn’t collected on time

Without these rules, you can end up holding unwanted stock indefinitely, or you may be accused of “wrongfully” returning or discounting items.

5. Pricing, Discounts And Promotions

Consignment arrangements often fail because of mismatched expectations about pricing.

Your consignment form should clearly state:

• the agreed sale price or pricing method
• whether you can discount, and by how much
• whether you need written approval before discounting
• how promotions work (for example, storewide sales, bundles, gift-with-purchase offers)

If you run an ecommerce store, you’ll also want to clarify how dynamic pricing, promo codes, and marketplace fees work.

6. Commission, Fees And Payment Terms

This is where the money mechanics must be crystal clear.

Common structures include:

• a percentage commission to the consignee (e.g. 30% of sale price)
• a fixed fee per item sold
• cost recovery deductions (e.g. credit card fees, platform fees, packaging, shipping)

In your consignment form, include:

• how commission is calculated (on gross sale price, net of GST, net of refunds, etc.)
• when you pay the consignor (weekly, fortnightly, monthly, or after a settlement period)
• how you provide sales reporting (statements, portal access, receipts)
• whether you can set-off amounts owed (for example, to cover chargebacks, refunds or damage costs)

If you’re unsure about the right structure, it can help to align it with your broader Terms of Trade so your business stays consistent in how it charges and pays.

7. GST And Tax Handling

Consignment can create confusion around GST and invoicing responsibilities.

At a minimum, your consignment form should address:

• whether prices are inclusive or exclusive of GST
• who is responsible for GST reporting on the sale (this often depends on the legal structure of the arrangement)
• who issues the tax invoice to the end customer
• whether the consignor must provide an ABN (and what happens if they don’t)

This section is general information only and isn’t tax advice. Because GST and invoicing outcomes can vary depending on the model and the parties involved, it’s a good idea to confirm the right approach for your business with your accountant or a registered tax agent.

8. Risk Of Loss Or Damage (And Insurance)

One of the biggest “what ifs” in consignment is: what happens if the goods are damaged, lost, stolen, or destroyed?

Your consignment form should set out:

• who bears the risk while goods are in the consignee’s possession
• what standard of care the consignee must meet (for example, reasonable care)
• whether the consignee is liable for theft, fire, flooding or accidental damage
• whether either party must maintain insurance (and if so, what kind)
• any caps on liability (if appropriate and legally workable)

Even a simple clause here can prevent a dispute that escalates into a relationship-ending argument.

9. Returns, Refunds And Customer Complaints

If you sell goods to consumers, you’ll need processes that align with the ACL.

Your consignment form should address:

• who decides whether to accept returns (keeping in mind ACL obligations)
• who pays for return shipping (if online)
• who bears the cost of refunds and chargebacks
• how faulty or damaged goods claims are handled
• who pays for repairs/replacements (if applicable)

This is especially important if the consignor is also the manufacturer or the only party who can fix defects.

10. Warranties, Product Safety And Compliance

Depending on what you’re selling, product safety and compliance can be a major risk area.

For example, cosmetics, children’s products, electronics, or food-adjacent items may carry extra legal and regulatory obligations.

Your consignment form can include warranties from the consignor that:

• the goods are safe and fit for sale
• they comply with relevant standards and labelling requirements
• they don’t infringe third-party rights
• any claims about the goods (materials, origin, performance) are accurate

This won’t eliminate all risk, but it helps allocate responsibility and creates a clear record if a problem arises.

11. Marketing, Photos And Intellectual Property

If you’re promoting consigned goods, you may use the consignor’s brand names, logos, and product photos. That’s intellectual property (IP), and it should be handled carefully.

Your consignment form should cover:

• whether the consignee can use photos and product descriptions for marketing
• whether the consignee can create new photos/videos (and who owns them)
• any branding guidelines
• rules around using the consignor’s trade marks

When you’re building a recognisable brand, it also helps to understand how trade marks work generally, including trade mark classes if you’re thinking about registering your own.

12. Record-Keeping And Stock Audits

Stock disputes are common in consignment arrangements. Your consignment form should support clean record-keeping by stating:

• how stock is checked in and checked out
• how often you provide stock reports
• whether the consignor can request a stock audit (and how)
• what happens if there’s a discrepancy

If you operate across multiple locations, this is even more important.

13. Termination And Immediate Return Rights

Sometimes, the relationship doesn’t work out (or your business model changes). Your consignment form should say:

• how either party can end the consignment arrangement
• what notice is required
• whether you can terminate immediately for serious issues (for example, suspected counterfeit goods, non-payment, misconduct, reputational risk)
• how quickly stock must be collected/returned after termination

Clear exit rules reduce disruption and protect your cashflow and operations.

14. Confidentiality (If Relevant)

If the consignor is sharing supplier pricing, manufacturing information, customer lists, or other sensitive details, you may want confidentiality language.

For more detailed arrangements, a separate Non-Disclosure Agreement can be useful, particularly if you’re exploring a longer-term partnership.

15. Signatures And Date

It’s easy to overlook, but signatures matter.

Your consignment form should include:

• date
• name and signature of consignor
• name and signature of consignee (or authorised representative)

If someone is signing on behalf of a company (or another person), make sure the document clearly shows who is signing and in what capacity, as signing on behalf can create confusion if it’s not done properly.

Common Consignment Mistakes That Cause Disputes

Even a well-meaning consignment arrangement can blow up if the basics aren’t set out clearly.

Here are some common mistakes we see small businesses run into:

• Not listing the goods properly: if there’s no itemised list, it’s hard to prove what was delivered, sold, or returned.
• Unclear payment timing: the consignor expects payment immediately, but your business runs monthly settlements.
• No rules for discounting: you discount stock to move it, and the consignor claims you undersold their products.
• No clarity on theft/damage: an item goes missing and both sides assume the other bears the loss.
• No plan for refunds: a customer return happens and the consignor refuses to accept the stock back or cover the cost.
• Mixing consignment stock with owned stock: without clean separation and records, it becomes hard to track ownership.

A clear consignment form won’t prevent every problem, but it will give you a practical framework to resolve issues quickly and fairly.

Do You Need A Separate Consignment Agreement As Well?

Sometimes, yes.

A single consignment form can work well when:

• the arrangement is simple
• the goods are low-to-medium value
• you have repeat transactions and the form captures the key details each time

But you may want a more detailed consignment agreement if:

• the consignor is supplying large volumes or high value items
• your business is warehousing goods and handling fulfilment
• you’re investing in marketing spend for that consignor’s goods
• there are complex returns/refund processes
• there are exclusivity promises or territory arrangements
• you want more detailed clauses on liability, warranties, and dispute resolution

In those cases, a broader contract can sit “above” your consignment form, and the form becomes the operational record for each delivery and batch of goods.

It can also be helpful to align your consignment process with customer-facing documents (like ecommerce terms), so your store’s rules are consistent from the customer side and the supplier side. If you sell online, your eCommerce Terms and Conditions can be part of that wider setup.

Key Takeaways

• A consignment form records the key details of goods supplied for sale or holding, and helps prevent disputes about stock, pricing, and payments.
• Your consignment form should clearly identify the parties, describe the goods, set the consignment period, and explain when ownership transfers.
• Pricing rules, commission/fees, and payment timing should be written in plain language so cashflow expectations are aligned from day one.
• Consignment arrangements should address risk (loss, damage, theft), insurance expectations, and what happens with returns, refunds and chargebacks.
• If you’re selling to consumers, your customer obligations under the Australian Consumer Law still matter, so allocate responsibilities with the consignor thoughtfully.
• For higher value or complex arrangements, a separate consignment agreement alongside a consignment form can give your business stronger protection.

If you’d like help putting together a consignment form (or a more detailed consignment agreement) that fits how your business actually operates, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.