Watch consignment: the agreement dealers need

Consignment lets you show a watch you never paid for. The owner keeps the risk of the price, you keep a commission, and your capital stays free for stock you actually want to own.

It only works if the paper is right. A handshake consignment is fine until the watch is stolen from your shop, the owner wants it back on a Saturday, or you sell it 5% under what they had in mind.

Consignment or agency: decide first

Two models look the same to the customer and are very different in law and tax.

Consignment (Kommission). You sell in your own name, for the account of the owner (§ 383 HGB in Germany). The buyer's contract is with you. For VAT, the law treats it as if the owner sold the watch to you and you sold it on (§ 3 Abs. 3 UStG), so your invoice covers the full price.

Agency. You sell in the owner's name and only arrange the deal. The buyer's contract is with the owner. You invoice your commission, not the watch.

Which one you run decides what your invoice shows, which tax scheme can apply and who the buyer turns to with a claim. If the owner is a private person, it also decides whether the margin scheme (§ 25a UStG) is on the table. Agree the model with your tax advisor once, then write every contract the same way.

What the agreement needs

A consignment agreement for a watch should cover at least:

• The watch. Brand, reference, serial, year, set and condition, with photos at handover. The serial is what proves later that the watch you return is the one you received.
• Commission. A percentage of the actual sale price, retained from the proceeds.
• Term and return. How long you may sell it, and that it comes back promptly and unchanged if it does not sell.
• Minimum price. You may not sell below it without the owner's written consent. This is the clause most disputes are about.
• Settlement. A statement after the sale and payout of the proceeds, less commission, to a named account within a set time.
• Retention of title. The watch stays the owner's until they are paid. You may not pledge it.
• Storage and care. You store it with the care of a prudent merchant.
• Insurance. Who insures it against theft, loss and damage while it is with you. Check that your policy actually covers third-party goods.
• Liability and a severability clause.

Hand the watch over with a short protocol: condition, set, photos, both signatures. When it goes back unsold, the same protocol in reverse.

Where consignment goes wrong

• No minimum price in writing. The owner remembers 48k, you remember 45k.
• Consigned watches mixed with own stock. Your inventory value, your insurance and your margin report are all wrong.
• The watch sits for months. Nobody owns the decision to lower the price or return it. Set a review date in the contract term.
• Payout drifts. The owner calls three times before the money arrives. A fixed settlement period avoids that.

How ChronoDesk handles it

A consigned watch is a watch record like any other, with its own consignment status, so you can always tell consigned pieces apart from stock you own.

From that record, ChronoDesk writes the consignment contract with the clauses above (commission, term and return, minimum price, settlement, retention of title, storage, insurance, liability), plus the handover protocol. Both come from the same data as the later invoice, so the serial, price and owner match on every page. See invoicing.

Because days in stock are tracked per piece, a consigned watch that sits too long shows up in your aging list next to your own stock. More on that in aged watch inventory. And when a client is looking for exactly that reference, their wish list on the customer card tells you who to call.

FAQ

Is consignment the same as Kommission?

In German law, a sale in your own name for someone else's account is a Kommission under § 383 HGB. "Consignment" is used loosely in English for both this and the agency model, which is why the contract should say which one it is.

Who insures a consigned watch?

Whoever the contract says. Most consignors expect the dealer to, and many dealer policies cover only their own stock. Check yours before you take the first piece.

ChronoDesk is free for 60 days. Write your next consignment contract from the watch record. See the plans.