Concessions and consignment stock

Department stores, garden centres and fashion retailers often fill their floors with concessions and consignment stock, which reduces their inventory risk. Whether those sales are reported gross or net, and whose balance sheet the stock sits on, depends on who controls the goods. This guide compares the arrangements and works through the numbers.

By Mirza Fahad Baig, Chartered Accountant. Reviewed by Hamza Fida, Chartered Accountant. 3 minute read.

Short answer

Concessions and consignment both put other companies' goods on a retailer's shelves, but the accounting differs. In a concession, a brand runs its own space inside a department store, and the store usually acts as agent, recognising only its commission as revenue. In consignment, the retailer holds a supplier's goods and pays for them only when sold; the goods are not its inventory until then, but it is often principal for the sale to the customer. In this guide's example, 1 million of concession sales give the store 250,000 of revenue, while 1 million of consignment sales give 1 million.

At a glance

Concession
Brand sells in the store's space
Store in a concession
Usually agent: commission
Consignment
Supplier owns goods until sold
Consignment stock
Not the retailer's inventory
Consignment sale
Often principal: gross
Disclosure
Gross transaction value common
Concessions and consignment stockConcession: Brand sells in the store's space; Store in a concession: Usually agent: commission; Consignment: Supplier owns goods until sold; Consignment stock: Not the retailer's inventory; Consignment sale: Often principal: gross; Disclosure: Gross transaction value common.KEY FACTS AT A GLANCEConcessions and consignment stockConcessionBrand sells in thestore's spaceStore in a concessionUsually agent: commissionConsignmentSupplier owns goods untilsoldConsignment stockNot the retailer'sinventoryConsignment saleOften principal: grossDisclosureGross transaction valuecommonTax BakersConcessions and consignment stockConcession: Brand sells in the store's space; Store in a concession: Usually agent: commission; Consignment: Supplier owns goods until sold; Consignment stock: Not the retailer's inventory; Consignment sale: Often principal: gross; Disclosure: Gross transaction value common.KEY FACTS AT A GLANCEConcessions and consignment stockConcessionBrand sells in the store's spaceStore in a concessionUsually agent: commissionConsignmentSupplier owns goods until soldConsignment stockNot the retailer's inventoryConsignment saleOften principal: grossDisclosureGross transaction value commonTax Bakers
Key facts at a glance, as set out in this guide.

Concessions and consignment compared with own stock

Concession vs consignmentConcession vs consignmentTOPICConcessionConsignmentWho owns the stockBrand operatorSupplier until soldWho sets the priceBrand operatorRetailerOn the retailer's balance sheetNoNo, until soldRetailer's revenueCommissionFull sale priceUsual roleAgentPrincipal
Both avoid inventory risk; only consignment usually means gross revenue.

Concessions and consignment: an example

ConcessionConsignment
Sales to customers1,000,0001,000,000
Retailer's revenue250,000: 25% commission1,000,000
Cost of salesNil650,000 owed to the supplier
Gross profit250,000350,000
Inventory on the balance sheetNoneNone until sold

The concession operator employs its own staff, sets its own prices and owns its stock; the store provides the space and the till and keeps a commission. In the consignment arrangement, the retailer chooses the stock, sets the prices, sells as its own and pays the supplier for what sells.

Why is a store usually an agent for concession sales?

Under IFRS 15, the principal or agent question turns on control, and the store does not control the goods before they are sold: the concession operator owns the stock, sets the price and is responsible for the products. The store's promise is to provide space and services to the operator. If the store takes primary responsibility for the products and sets the prices, the analysis may change.

Is consignment stock the retailer's inventory?

No, as long as the supplier keeps control, typically because the retailer can return unsold goods and the supplier can recall them or redirect them. The retailer records the goods in its systems for control purposes but not on its balance sheet. Whether the retailer is principal for the sale is a separate question: many retailers obtain control momentarily when the customer buys, set the price and handle the customer relationship, and conclude they are principal, reporting the full sale.

How are concession commissions structured?

Usually as a percentage of the concession's sales, sometimes with a minimum annual payment and charges for services such as staff, utilities and marketing. A guaranteed minimum is part of the store's consideration for providing space and services, recognised over the period; it does not make the store principal for the goods.

What about gift cards and loyalty points used in concessions?

When a customer pays a concession with the store's gift card, the store's gift card liability is settled and it owes the concession for the sale, less commission. Loyalty points earned on concession purchases are the store's obligation, so the store defers part of its commission or bears the cost under the concession agreement.

What about sale or return arrangements?

Under sale or return, the retailer buys the goods but can return unsold items. If control passes to the retailer on delivery, the goods are its inventory and the supplier accounts for a right of return. If the return right is so extensive that the supplier keeps control, the arrangement works like consignment.

How do retailers present concession sales?

Many report gross transaction value, the total sales through the tills including concessions, alongside revenue, to show the scale of activity. Under IFRS 18, a revenue-like measure of this kind is not a management-defined performance measure, because it is not a subtotal of income and expenses, but it should be clearly labelled and reconciled to revenue. See online marketplace revenue, IAS 2 explained and retail accounting.

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Questions people ask

How do department stores account for concession sales?

Usually as an agent, recognising only their commission as revenue, because the concession operator controls the goods.

Is consignment stock the retailer's inventory?

No, while the supplier keeps control; the retailer records the goods only when it buys them at the point of sale.

Are consignment sales reported gross?

Often yes, if the retailer is principal for the sale to the customer, setting the price and handling the customer relationship.

What is gross transaction value?

Total sales through the retailer's tills including concession sales, reported alongside revenue to show the scale of activity.

Sources

Every fee, date and rule on this page was taken from these official and primary sources.

  1. IFRS Foundation: IFRS 15 Revenue from Contracts with Customers
  2. IFRS Foundation: IAS 2 Inventories

Rules and fees change. If you are reading this long after October 4, 2026, confirm the figures with the source before you rely on them.

RetailOnline marketplaces: principal or agentRetailRetail accounting: the key IFRS issuesIAS 2IAS 2 inventories explained

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This guide is general information. It is not tax or legal advice for your situation.