When the pilgrims on the Mayflower left the Netherlands for Plymouth Rock, they likely had no idea they were starting a journey that would eventually grow into a part of one of the world's most influential countries, or that their experiences and hardships would spark the creation of a nationally treasured holiday. During November we remember their stories and celebrate their traditions, especially in elementary school. History classes discuss how they got here, Thanksgiving crafts flood the fridge and tables in our homes, and everyone looks forward to huge Thanksgiving feasts. But, how exactly did they pay for their expedition?
Financing the Journey
Financing an adventure in the New World was tricky. The new colony lacked the social, fiscal, and physical infrastructure people enjoyed in their homelands. Thomas Weston funded the venture by forming a joint-stock company with John Pierce. The company, John Pierce and Associates, were the ones who actually received the grant for the new colony from the Virginia company (the land holders where the new colony was supposed to be founded). In exchange for investing in John Pierce and Associates, every free adult colonist gained a share in the joint-stock company. Furthermore, every additional investment of 10 pounds would also receive a share. For the first 7 years of the colony, the company would function as communistic type of distribution system, meaning that all resources were pooled and then distributed based on need. At the end of the 7 years, all of the earnings would be divided between those that held shares.
How Consignment Could Have Helped
Because of how the joint-stock company was set up, the Pilgrims could have benefited from consignment. Merriam-Webster defines consignment as "the act or process of sending goods to a person or place to be sold". Think of it like a consignment shop: you have goods that need to be sold, but need a place to sell them. In exchange for a percentage of the profits, a store owner gives you a place to sell your goods. Keep in mind that consignment does not only mean used items.
Unfortunately, the new residents of Plymouth had to wait for seven years before they could see any of the profits from their initial investment. This was particularly unfair, as about half of the colony passed away before the end of the first year. With consignment, you gain access to the profit from the goods you sell almost immediately. If the Pilgrims had a consignment deal set up instead of a joint-stock company, they would have seen payment from their investments much earlier.
For example, let's say the Pilgrims needed to grow crops, like beans, tomatoes, or even corn, but lacked the funds to purchase the initial seeds. By using a consignment arrangement, investors from home could have purchased those seeds and given them to the Pilgrims. Technically, the investors from home (friends, family, or other supporters from their communities) would own both the seeds and the plant, although the Pilgrims would care for them. Those seeds would eventually be processed into useable goods, whether those goods were food or something else. In exchange for their initial investment, the investors would receive a portion of the profits from those goods. Using consignment instead of a joint-stock company would have let the Pilgrims see the efforts from their labor much earlier than the seven year contract set in place.
Today, consignment usually takes the form of reselling gently used goods. However, consignment has the potential and power to do much greater things. When used correctly, consignment actually has the power to help strong brands continue the voyages they already started. Traditionally, brands borrow from banks to produce enough capital to quickly develop product to be sold. However, this leaves small companies beholden to banks and subject to incredibly exorbitant interest rates. This can cripple growth at the most in-opportune time.
Instead, strong brands might consider a consignment opportunity, otherwise known as a Co-Op. These programs allow brands to pre-sell their products to a buyer so they gain some initial capital. Once those items sell at a price higher than the buyer bought into, the buyer earns part of the profit. This innovative new form of crowdfunding pairs brands with a source of capital outside of traditional banks. The community members who purchase the inventory own said inventory as a tangible asset, lowering the overall risk.
How Consignment with Kickfurther Can Further Your Voyage
Kickfurther functions as a consignment platform. To date, we have funded over 400 businesses. Kickfurther works because of three reasons: it helps finance your next order while pulling in your existing fans to help your business grow in your community and ours. Many laud Kickfurther as the future of small business funding, for great reason.