Are you confused about the difference between concession and consignment? You’re not alone. These two words are often used interchangeably, but they actually have distinct meanings in the world of business.
Concession and consignment are both terms used in the retail industry to describe different types of agreements between suppliers and retailers. While they may seem similar at first glance, there are some key differences between the two that are important to understand if you’re involved in the business of buying and selling goods.
So, what exactly do concession and consignment mean? Let’s take a closer look.
Concession refers to an agreement between a supplier and a retailer in which the supplier allows the retailer to sell their products in exchange for a percentage of the profits. In other words, the supplier retains ownership of the goods and receives a share of the revenue generated from their sale. This type of arrangement is common in industries such as fashion, where high-end brands may partner with department stores to sell their products.
Consignment, on the other hand, refers to an agreement in which a supplier provides goods to a retailer, but the retailer only pays for the goods that are actually sold. Any unsold items are returned to the supplier. This type of arrangement is often used in industries such as antiques and collectibles, where it can be difficult to predict demand for certain items.
Now that we’ve established the difference between concession and consignment, let’s dive deeper into the pros and cons of each type of agreement.
Concession
A concession is a business arrangement where one party, known as the concessionaire, is granted the right to operate a business in a particular location or area. The concessionaire pays a fee or a percentage of their revenue to the entity that granted the concession, known as the grantor. This type of arrangement is often used in industries such as retail, food service, and tourism.
Consignment
Consignment is a business arrangement where the owner of goods, known as the consignor, entrusts their goods to another party, known as the consignee, to sell on their behalf. The consignee agrees to pay the consignor a percentage of the sale price once the goods are sold. This type of arrangement is often used in industries such as fashion, art, and antiques.
How To Properly Use The Words In A Sentence
When it comes to using concession and consignment in a sentence, it’s important to understand the subtle differences between the two terms. While they may seem interchangeable at first glance, they actually have distinct meanings that can impact the clarity of your writing. Here’s a closer look at how to use each word in a sentence:
How To Use “Concession” In A Sentence
Concession is a noun that refers to something that is granted or given up in order to reach an agreement or compromise. It can also refer to a physical space that is rented or leased for a specific purpose. Here are a few examples of how to use concession in a sentence:
- After much negotiation, the union made a concession on healthcare benefits in order to secure higher wages for its members.
- The company agreed to make a concession by offering a discount to customers who purchased multiple products.
- The stadium’s concession stands were packed with hungry fans during the championship game.
As you can see, concession is often used in the context of negotiations or business deals, but it can also refer to physical spaces like concession stands or booths.
How To Use “Consignment” In A Sentence
Consignment is a noun that refers to the act of giving goods to a third party to sell on your behalf. The third party (usually a retailer or consignment shop) agrees to sell the goods and then splits the profits with the original owner. Here are a few examples of how to use consignment in a sentence:
- The artist consigned several of her paintings to a local gallery for an upcoming exhibit.
- I decided to sell my vintage clothing collection on consignment at a trendy boutique in the city.
- The consignment shop specializes in high-end furniture and home decor.
As you can see, consignment is often used in the context of selling goods through a third party, whether it’s artwork, clothing, or furniture.
More Examples Of Concession & Consignment Used In Sentences
Understanding the correct usage of concession and consignment is essential in the world of business. Here are some examples of how these terms can be used in sentences:
Examples Of Using Concession In A Sentence
- The company made a concession to the union by agreeing to increase wages.
- As a concession, the restaurant offered a free dessert to the dissatisfied customer.
- The government made a concession to the opposition party by agreeing to change the legislation.
- As a concession to the new regulations, the company implemented stricter safety measures.
- The landlord made a concession to the tenant by allowing them to pay rent in installments.
- The company made a concession to the customer by offering a discount on their next purchase.
- As a concession to the employees, the company provided free lunch on Fridays.
- The government made a concession to the environmentalists by agreeing to reduce carbon emissions.
- The seller made a concession to the buyer by agreeing to cover the cost of repairs.
- As a concession, the airline offered a free upgrade to first class for the delayed flight.
Examples Of Using Consignment In A Sentence
- The company sent the products on consignment to the retailer.
- The artist put their paintings on consignment at the local gallery.
- The manufacturer shipped the goods on consignment to the distributor.
- The consignment shop sold the vintage clothing on behalf of the owner.
- The bookstore accepted books on consignment from local authors.
- The auction house sold the antique furniture on consignment for the estate.
- The consignment agreement stated that the seller would receive a percentage of the sale price.
- The retailer returned the unsold items to the supplier on consignment.
- The consignment store offered a variety of designer clothing at discounted prices.
- The consignment contract outlined the terms and conditions of the agreement.
Common Mistakes To Avoid
When it comes to the world of retail, there are two terms that are often used interchangeably: concession and consignment. However, using these terms interchangeably can lead to some common mistakes that can negatively impact your business. Here are some of the most common mistakes to avoid:
Mistake #1: Using Concession And Consignment Interchangeably
One of the most common mistakes people make is using the terms “concession” and “consignment” interchangeably. While both involve a retailer selling goods on behalf of a supplier, there are some key differences between the two.
A concession is a retail space that is leased to a supplier, who then sells their products directly to customers. In this arrangement, the supplier is responsible for the inventory and the retailer receives a percentage of the sales. On the other hand, consignment involves a retailer selling goods on behalf of a supplier, but the supplier retains ownership of the inventory until it is sold. In this arrangement, the retailer receives a percentage of the sale and the supplier is responsible for any unsold inventory.
Using these terms interchangeably can lead to confusion and misunderstandings, which can ultimately hurt your business. It’s important to understand the differences between the two and use the correct terminology when discussing these arrangements.
Mistake #2: Failing To Negotiate Terms
Another common mistake people make is failing to negotiate the terms of a concession or consignment agreement. It’s important to have a clear understanding of the terms and conditions of the agreement, including the percentage of sales, payment terms, and who is responsible for unsold inventory.
By failing to negotiate these terms, you could end up with an agreement that is not in your best interest. Take the time to review the agreement carefully and negotiate any terms that are not favorable to your business.
Mistake #3: Not Tracking Inventory
Finally, another common mistake people make is not tracking their inventory. Whether you are operating a concession or consignment arrangement, it’s important to keep track of your inventory to ensure that you are not overstocked or understocked.
By not tracking your inventory, you could end up with too much unsold inventory, which can tie up your cash flow and hurt your bottom line. Make sure you have a system in place for tracking your inventory and use it regularly to make informed business decisions.
Tips For Avoiding These Mistakes
To avoid these common mistakes, here are some tips to keep in mind:
- Understand the differences between concession and consignment
- Negotiate the terms of the agreement
- Track your inventory regularly
By following these tips, you can avoid common mistakes and set your business up for success.
Context Matters
When it comes to choosing between concession and consignment, context is key. Both methods have their advantages and disadvantages, and the right choice depends on a variety of factors.
Concession Vs Consignment
Concession and consignment are two different ways of selling products. In a concession arrangement, the seller (the concessionaire) rents space from the owner of the retail location (the concession holder) and sells their products directly to customers. In a consignment arrangement, the seller (the consignor) provides their products to a retailer (the consignee) who agrees to sell the products on their behalf, taking a percentage of the sale price as commission.
Factors To Consider
There are several factors that can influence the choice between concession and consignment. These include:
- Product Type: Some products may be better suited to one method over the other. For example, high-end luxury goods may be better sold through a concession arrangement where the seller has more control over the retail environment and customer experience, while consignment may be more appropriate for lower-value items.
- Retail Location: The location of the retail space can also impact the choice between concession and consignment. In a high-traffic area with a lot of foot traffic, a concession arrangement may be more beneficial as it allows the seller to directly interact with customers. In a less busy area, consignment may be a better option as the retailer can provide more exposure for the product.
- Relationship with the Retailer: The relationship between the seller and the retailer can also play a role in the choice between concession and consignment. If the seller has an established relationship with a retailer, consignment may be a better option as it allows the retailer to take on more risk and invest in the product. If the seller is new to the market, a concession arrangement may be more beneficial as it allows them to establish their brand and build relationships with customers.
Ultimately, the choice between concession and consignment depends on a variety of factors and should be carefully considered based on the specific context in which they are used.
Exceptions To The Rules
While concession and consignment are two widely used business models, there are certain exceptions where the rules for using them might not apply. Let’s take a closer look at these exceptions and explore their explanations and examples.
1. Exclusivity Agreements
When a supplier enters into an exclusivity agreement with a retailer, they might not be able to use either the concession or consignment business model. In this case, the supplier might have to sell their products directly to the retailer at a fixed price, without the possibility of returning unsold items. This is because exclusivity agreements often require the supplier to guarantee a certain level of sales, and the retailer might not want to take on the risk of unsold inventory.
2. High-end Luxury Goods
For high-end luxury goods, the concession business model might not be suitable. This is because luxury brands often have strict control over their branding and image, and they might not want to share their retail space with other brands. In this case, the brand might prefer to open their own stores or operate through a franchise model. Consignment might also not be suitable for luxury goods, as retailers might not want to take on the risk of unsold inventory, especially if the items are high-value.
3. Perishable Goods
Perishable goods, such as fresh produce or flowers, might not be suitable for either the concession or consignment business model. This is because these items have a limited shelf life and might spoil before they can be sold. In this case, the supplier might have to sell their products directly to the retailer at a fixed price, without the possibility of returning unsold items. Alternatively, they might use a different business model, such as direct-to-consumer or online sales.
4. Custom-made Goods
Custom-made goods, such as bespoke suits or handmade jewelry, might not be suitable for either the concession or consignment business model. This is because these items are often made to order and might not be suitable for mass production. In this case, the supplier might have to sell their products directly to the customer, either through a physical store or an online platform. Alternatively, they might use a different business model, such as a subscription service or a crowdfunding campaign.
5. Limited-edition Items
For limited-edition items, such as collector’s items or rare books, the consignment business model might not be suitable. This is because these items are often one-of-a-kind and might not be suitable for mass production or distribution. In this case, the supplier might have to sell their products directly to the customer, either through a physical store or an online platform. Alternatively, they might use a different business model, such as an auction or a private sale.
Practice Exercises
One of the best ways to improve your understanding and use of concession and consignment is through practice exercises. Here are a few exercises to help you get started:
Exercise 1: Fill In The Blank
Choose the correct word (concession or consignment) to fill in the blank in the following sentences:
- The store owner agreed to take the designer’s new line on __________.
- _____________ stands for a seller’s agreement to sell a product on behalf of the owner.
- The company made a ___________ to reduce prices in order to compete with its rivals.
- _____________ is a seller’s agreement to sell a product on behalf of the owner.
- The CEO made a ___________ that the company would donate a portion of its profits to charity.
Answer Key:
- consignment
- Consignment
- concession
- Consignement
- concession
Exercise 2: Sentence Completion
Complete the following sentences using either concession or consignment:
- The boutique owner agreed to take the new designer’s line on ____________.
- The company made a ___________ to reduce prices in order to compete with its rivals.
- The CEO made a ___________ that the company would donate a portion of its profits to charity.
- The designer agreed to a ___________ agreement with the retailer.
- The store owner made a ___________ to allow customers to return items for a full refund.
Answer Key:
- consignment
- concession
- concession
- consignment
- concession
By practicing these exercises, you can improve your understanding and use of concession and consignment in sentences. Remember, concession refers to giving in or yielding, while consignment refers to the act of giving over goods for sale or safekeeping.
Conclusion
In conclusion, understanding the difference between concession and consignment is crucial for effective communication. Concession is a type of agreement where one party gives up something to the other party, while consignment is an arrangement where one party entrusts goods to another party to sell on their behalf.
It is important to use these terms correctly in business and legal contexts to avoid confusion and potential legal disputes. Misusing these terms can lead to misunderstandings and misinterpretations of agreements.
Key Takeaways
- Concession is an agreement where one party gives up something to the other party.
- Consignment is an arrangement where one party entrusts goods to another party to sell on their behalf.
- Using these terms correctly is important in business and legal contexts.
- Misusing these terms can lead to misunderstandings and legal disputes.
By continuing to learn about grammar and language use, you can improve your communication skills and avoid common mistakes. Whether you are a student, a professional, or a casual writer, there is always room for improvement.
Thank you for taking the time to read this article. We hope that it has been informative and helpful in your understanding of concession and consignment.
Shawn Manaher is the founder and CEO of The Content Authority. He’s one part content manager, one part writing ninja organizer, and two parts leader of top content creators. You don’t even want to know what he calls pancakes.