Which term refers to a long-term agreement in which a dealer or manufacturer loans goods to a retailer?

• A. A discounted price for buying an entire parcel or a substantial part of it.
• B. A long-term agreement in which a dealer or manufacturer loans goods to a retailer.
• C. The price of a gem divided by its carat weight.
• D. Exchanging information and developing contacts among people with a common professional or special interest.

Answer: (B)

Consignment is a lending arrangement where the supplier keeps ownership of the goods and the retailer is allowed to sell them on the supplier’s behalf. It’s often set up for the long term, giving the retailer access to inventory without paying upfront, while the supplier preserves ownership and gets paid only for items that are sold. Unsold merchandise can usually be returned under the terms of the agreement, maintaining flexibility for the retailer. In the jewelry trade, consignment helps stores offer a broader selection while suppliers maintain control of their stock until sale.

The other descriptions refer to different concepts: a discount tied to buying a large quantity, the price per carat of a gem, and networking among professionals—none of which describe the arrangement where goods are loaned to a retailer by the dealer or manufacturer.