What is a "consignment" in the context of auctions?

A "consignment" in the context of auctions refers to a legal agreement where the owner of an item entrusts that item to an auctioneer for the purpose of selling it. This arrangement is fundamental to the auction process because it allows auctioneers to sell items on behalf of individuals or businesses who own those items but wish to leverage the auction platform for exposure to potential buyers.

In this arrangement, the auctioneer acts as an intermediary. The owner typically agrees to certain terms regarding the sale, including commission rates and any costs associated with the auction. Once the item is sold, the auctioneer will remit the agreed-upon proceeds to the owner after deducting fees. Understanding the concept of consignment is crucial for anyone involved in auctions, as it outlines the responsibilities and expectations between the auctioneer and the item owner, ultimately facilitating a successful transaction.