Consignment Stock Agreement Template for Australia

A Consignment Stock Agreement allows you to place goods with retailers or distributors while maintaining ownership until the goods are sold to end customers. This arrangement provides significant flexibility for expanding your market reach without requiring distributors to invest upfront capital in inventory, making it particularly attractive for new product launches, seasonal goods, or entering new markets.

When do you need this document?

You'll need a Consignment Stock Agreement when establishing relationships with retailers who want to stock your products without purchasing them upfront. This is common in fashion retail where boutiques display designer goods, art galleries showcasing artists' works, or manufacturers placing products in specialty stores. The agreement is also essential when testing new markets, launching seasonal collections, or working with distributors who prefer consignment terms to reduce their inventory risk. Additionally, it's required when goods are stored at third-party warehouses or when complex distribution chains involve multiple parties handling your products.

Key legal considerations

The most critical aspect is clearly establishing that you retain ownership of goods until sale to end customers. Your agreement must specify detailed stock management procedures, including inventory tracking, condition reports, and regular stocktakes. Commission structures and payment terms need careful definition, covering when payments become due and how sale proceeds are calculated and remitted. You should address insurance responsibilities, determining who covers goods during the consignment period and what happens if products are damaged or stolen. The agreement must also cover termination procedures, including how unsold goods are returned and any associated costs. Consider including provisions for minimum sales targets, display requirements, and marketing obligations to ensure your products receive appropriate promotion.

Legal requirements in Australia

Under the Personal Property Securities Act 2009 (Cth), your consignment arrangement may create a security interest that requires registration on the Personal Property Securities Register (PPSR) to protect your ownership rights against third-party claims. The Competition and Consumer Act 2010 (Cth) governs trade practices and may impact pricing arrangements and exclusive dealing terms in your agreement. You must comply with Australian Consumer Law if your goods reach consumers, ensuring warranty and consumer guarantee obligations are properly allocated between parties. GST implications require careful consideration, as the consignee typically becomes liable for GST on sales while you remain responsible for BAS reporting on your retained ownership. State-based Sale of Goods legislation may apply depending on your location, affecting transfer of title and risk allocation. If your arrangement involves consumer goods, additional disclosure requirements under Australian Consumer Law may apply, particularly regarding consumer guarantees and return policies.