Online reseller wants to sell my product on consignment - what should I be wary of?

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I've been pushing my bicycle accessory product (RRP £39.99/$54.99) to online resellers over the past few weeks and have had a few bite. One has offered me a consignment agreement, whereby I essentially will send him stock free of charge and he will pay for the amount sold at the end of the month (and send me back any unsold).

I'm pretty much a newbie when it comes to handling wholesalers and have zero experience of consignment agreements. They seem pretty sketchy to me. Granted, it might get me a foot in the door, but I don't want to get burned.

Have you any advice for things I should look out for, or things I should keep in mind?

Here's what the message was:

"[Consignment agreements] are quite simple. We prepare an agreement to be signed by both you and us. The general ideas are:

- goods ordered remain your property until they are sold to a third party

- the proceeds and sales are recorded (usually, on online document is best)

- end of month, we send a sales report and based on the sales you send us an invoice and money is in your account within 7 days

- if the agreement ends and [stock] is not sold the remaining stock is returned to you

- we are responsible for the stock when it is in our hands

That is pretty much it. We usually set the purchase price we need to pay for every unit ordered within the agreement and create an attachment with the first PO."

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