alt Hacker NewsThe problem with consignment is that the consignor wants the maximum price but the consignee wants a quick sale because 10% of a few bucks more means very little and they have to hold the inventory.
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"Holding inventory" is only problem if the store is full.
Yup, if I worked in a field where consignment was an option I'd refuse to do it - it's a huge headache. So I'd absolutely believe that the corporation has a policy against accepting consignment offers and might have a case to recover damages or something against the original franchisee. But the way they've handled this situation still appears to be atrocious. Lets say you consigned 200k at a 10% commission, 50k sold under the original franchisee and you were paid 30k already. If the franchise transferred and the company wanted out there should be an exit[1] in the contract to pay the additional 15k and then return the goods to the original owner. I think it's important to remember this sort of an option was always on the table.
1. Even if the original consignment contract was poorly drawn up without a clear exit clause I think it'd be reasonable to expect a resolution somewhere close to this in mediation.
Selling on consignment can be an absolutely great deal for shops, under the right conditions.
If I'm a lego trader and I buy your set for $900 hoping to sell it later for $1000, in the meantime that's $900 I can't invest in anything else. And maybe I guessed the set's value wrong and I end up unloading it for $800, taking a loss.
On the other hand, if I agree to sell that same set on consignment? Zero capital outlay, zero risk of me taking a loss - just some shelf space and admin work.