Professional Documents
Culture Documents
ANDHRA PRADESH
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How can a Trader increase his sales?
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Is it possible ?
Difficult
Why ?
Because it requires lot of manpower
and finance
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Then what is the alternative?
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To send the goods to agents at other places for sale on
commission basis is called Consignment
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Concept of Consignment:
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Terminology used:
Trader : Consignor
Agent : Consignee
Goods sent : Stock on Consignment
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Distinction between consignment and
sale
Consignment Sale
Ownership remains with Ownership Passes to the
the consignor buyer
Relationship between Relationship between
consignor and consignee Seller and Buyer is of
is of Principal and Agent creditor and debtor
Goods can be returned In all cases buyer cannot
by consignee at any time return
Expenses incurred by Buyer has to bear the
consignee recovered expenses
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Differences contd..
Consignment Sale
Consignee sends Account No such statement is
sales to consignor prepared
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Terms used in Consignment
Proforma Invoice
Account Sales
Advance
Commission
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Proforma Invoice
A Statement
prepared by consignor
sent to the consignee
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Proforma Invoice contains
Details of goods consigned
like quality, quantity, packing & markings and
Price
It is useful for calculation of customs duties
Mode of marketing
It helps the consignee in fixing the selling price of
goods
The price given may be cost price or market price
It is the minimum price at which the consignee is
allowed to sell
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Advance
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Commission
A reward payable to the consignee for selling
goods on behalf of the consignor
Fixed percentage
Calculated on gross sales
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Types of commission
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Ordinary commission
Fixed percentage
Calculated on gross sales
Paid by the consignor
To the consignee
For selling the goods
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Delcredre commission
In case of credit sales
If the amount is not received from debtors
Such loss of bad debts is generally borne by consignor
If consignee agrees to bear this loss of bad debts
Then the Consignor will pay him extra commission
This is called Delcredre commission
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Over riding Commission
Special commission
In addition to ordinary commission
To push a new line of product
Calculated on total sales
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Account sales
Periodical statement
Prepared by the consignee
Sent to the consignor
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Account sales contains
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Specimen of Account sales
Account sales of Consignee for the a/c risk of consignor
2,000
E. & O.E. xxxxxxxx
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Summary
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Quiz contd..
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Quiz
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Quiz
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Frequently asked Questions
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