Today we’re proud to announce that we will be launching, Inventory Inspection, a new product for businesses and buyers interested in using the Kickfurther platform.
As you know, we have been focusing on Purchase Order and Accounts Receivable backed Co-Ops since early in 2017. The decision to do so was based on the idea that we needed to get better at tracking consignment inventory. With purchase orders, it’s significantly easier to track one shipment of product from a manufacturer, over the ocean, to a retailer. When businesses are selling direct to consumer, they are shipping the inventory to hundreds of end customers, making it significantly more difficult to monitor.
Kickfurther has developed two products to address this need. One is Inventory Visibility which applies to businesses who keep their inventory with a third party warehouse. The second is Inventory Inspection for businesses that warehouse their own Inventory.
Inventory Inspection co-ops will be based on three things:
Stronger Vetting Requirements - Inventory Inspection co-ops are restricted to smaller raises and held to higher vetting standards than a similarly sized Inventory Visibility or Purchase Order backed Co-ops
Bi-weekly sales reports provided by the business - Businesses will self report the number of items of each funded SKU. Kickfurther will invoice them based on these self provide reports.
Monthly Inspections by a Third Party Inspection Service - Kickfurther will retain a third party inspection service to perform in person inventory inspections at the businesses warehouse facility on at minimum a monthly basis. Any discrepancy between self provided reports and inspections will be billed against immediately.
We funded five internal Co-Op tests to build the processes necessary to launch this product. We will be launching the first Inventory Inspection (II) Co-Ops in the coming days based on these tests.
The key differences between PO/AR backed Co-Ops Inventory Inspection Co-Ops are in the two following areas:
- Sales channel – PO/AR backed Co-Ops have a purchase order associated with the inventory funded on the Co-Op that is greater than the total value of the Co-Op. II Co-Ops have not assigned Kickfurther as the payee with their clients on orders greater than the value of the co-op.
- Payment terms – With PO/AR backed Co-Ops we often get payment assigned to us, meaning, when the retailer pays, they pay Kickfurther directly and we distribute payments to the users and the business. With II, we check on inventory levels and invoice the business. They have anywhere between 15 and 60 days to provide payment for the consignment inventory sold or transferred.
We believe Inventory Inspection is the best way for the crowd to support the growth of self-warehoused brands and products they love. Unlike equity crowdfunding, you’re not locked in with a business until exit. You might like the current designs of a product company, but who knows where they’re going. With an II Co-Op, you can fund the current production run of products you believe in.
Unlike rewards-based crowdfunding, you’re not committing to buying a product from a brand you like. Even the earliest of early bird reward tiers have margin built in wherein the business is making 10-30% profit. So long as the company abided by the terms of the consignment agreement, the worst-case scenario with a Kickfurther II Co-Op is you will end up getting the product at the cost the business paid, no margin. The best-case scenario is you end up earning 20-30% profit while helping a business you love grow.
We will describe which type of Co-Op you’re looking at in the Co-Op overview. All Co-Ops will still have their individual badges and rating system and the meaning of those are clear. If you have any questions or feedback, we would love to hear from you!
-Sean De Clercq