In a consignment arrangement, which entity maintains control of the goods?

In a consignment arrangement, the manufacturer maintains control of the goods. In such a setup, the manufacturer ships goods to a dealer or distributor, but ownership and control of those goods remain with the manufacturer until a sale occurs. The dealer acts as an agent for the manufacturer, selling the goods on their behalf, and does not take inventory ownership itself.

This arrangement allows the manufacturer to retain rights over the unsold inventory, meaning that if the items do not sell, they can be returned. The manufacturer also typically faces lower risk because they do not lose ownership of the products until a sale has been made, which can make inventory management more efficient.

The dealer/distributor facilitates the sale of the goods but does not have ownership until the goods are sold to a final customer. The customer purchasing the goods from the dealer does not have control over the goods until after the transaction is completed. Therefore, it's clear why the manufacturer holds control in a consignment agreement.