In a diamond bourse, if you need an 8 ct., $75,000 stone, you go to
someone you possibly have never met, negotiate the deal, shake hands
and walk away with the stone. The understanding is that you will
either return the stone or present the dealer with the cash equivalent
(diamonds=cash), not just in 10 days, but as soon as your deal is
consummated. It is merely a way of having the end-buyer pay for the
stone, and to keep the deal streamlined - one payment instead of 2 or
more. Also the understanding is that the portion of the money that
is the $75,000 is not your money to begin with - it goes to the
dealer ASAP, because it is his. The Memo (memorandum) process is
just a formalization of that process. “I agree to either return the
product or deliver the cash value to you.” Consignment (pardon my
cynicism) is a way for a store to get you, the manufacturer, to
finance his business and stock his cases. You are, in effect, making
a loan to the store in question, often open ended. Plus, if you read
the agreements, there are often (usually) clauses that absolve the
store of responsibilities, and insurance, and more. I would guess
that probably every single Orchidian who has done consignment
business has at least one horror story.