Kickfurther is a crowdfunding platform that connects individual looking to earn money to small business owners with inventory funding needs. Kickfurther screens the companies that need inventory but is open to all individuals, also known as “Buyers.”
This platform is another example of how powerful crowdfunding can be for both the business and individual. If you’ve been looking for alternative online earning option, this one may be for you. However, tread very carefully with this platform. There are big risks, and some would argue the rewards don't outweigh the risks – so make sure you do your diligence beforehand.
To be clear, we don't recommend this platform as an investment. It's an interesting way to potentially earn more money, but it's very risky and speculative. While we do review it and try to highlight the core features of it, keep in mind the high risk involved.
As you read through this review, you can also sign up and explore for yourself – by signing up with this link, they'll give you $5 to get started.
Here’s how Kickfurther works.
Editors Note: Kickfurther announced that starting on 1/30/2017, they are changing several key components of their business model. We have not evaluated these changes and this review does not fully reflect any updates since it was originally written in November 2016. We encourage readers to share their thoughts on the changes in the comments. You can read about the changes here.
How Kickfurther Works
Let’s say an existing or fairly new company has created a product and can’t keep up with demand. They need money for more inventory and they need it fast. Possibly unable to get funding from a bank (or don't want to), they instead look to crowdfund their inventory. They sign up with Kickfurther.
Kickfurther looks into the company, takes a look at their market, product and profit margin. If Kickfurther feels this particular company would be able to successfully sell their inventory in a specific time frame with enough profit margin, they will present this company to their pool of buyers (this is where you come in).
As a buyer, you would then be able to choose whether or not you wanted to help crowdfund the company's inventory and of course, how much you’d like to participate. You’d be able to take a look at the rate of return the company is offering and timeframe in which they’re expected to sell their inventory.
As a Buyer on Kickfurther, you are not actually lending money or buying equity. You’re technically buying inventory on consignment, which is why this platform is available to everyone. In fact, as a Kickfurther Buyer, you can even help the companies you partner with in selling their inventory with your own Kickfurther store, if you choose to do so. You will receive 5% commission for every item you personally sell as well as the original payout agreement.
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Buying Inventory Through Kickfurther
As you can see from the example above, this company is looking to raise $204,953 to fulfill their inventory needs. If they raise this money, they’re expecting to pay inventory buyers an 11% return over eight months.
When you click on the Brand, you’re then taken to a screen that shows more information on the company. You can see the percentage sold for completion, which is the amount of inventory that needs to be sold for buyers to earn back their principal and pay out (which is 67% for this particular company.) You can also look at the company overview and growth, past Kickfurther Co-Ops, Kickfurther score and reviews.
Kickfurther is transparent with the information they offer which helps you determine whether or not you’d like to buy inventory for specific companies. One of my favorite pieces of information to look at is whether or not the company has a purchase order already to cover the inventory. I've seen companies with purchase orders, and some without. If a company doesn't already have a purchase order, there's more risk with your money as they don't have buyers lined up.
Here's what it looks like:
As you can see, this company has a score of C1. But I like to look directly at % PO Covered By Purchase Orders, which is <1%. That means this company doesn't have any orders for the inventory they want to buy, increasing the risk dramatically.
On the flip side, look at this company:
This company at least has purchase orders lined up for 30-75% of the inventory. However, they are risky and have a lower score for other reasons.
If you do decide to partner with a Brand, you buy “packs” of inventory. Each “pack” of inventory is tied to a calculated lot of inventory which includes at least 1 of all of the SKU’s being funded (you can see the breakdown of percentage on the platform). As a result, every brand has their own “pack price”. In this case, one package of inventory is $91.09 so you would need to contribute in increments of $91.09.
You can contribute in amounts as small as $20, but not lower than what one package amount equates to.
With Kickfurther, the companies needing inventory have contracted to pay the buyers back in a certain time period. However, buyers can be paid back monthly as the inventory sells. If the inventory sells quicker than expected, buyers may receive the full amount of principal and payout early. However, it could also take a company longer to pay back the money than expected.
Remember, there are no guarantees here.
Also, it’s important to note that Kickfurther charges a 1.5% withdrawal fee to buyers.
What If A Company Doesn’t Sell Their Inventory?
Good question. Like any other earning strategy, contributing your money into small business inventory through Kickfurther offers no guarantees. It’s possible that, in some cases, a company may not be able to fulfill their commitment. In this case a few different things could happen.
First, the company could pay the consigned amount of the inventory out of their own pocket (which has happened, and is the best outcome). If this isn’t possible, the company is required to send all inventory to Kickfurther and then Kickfurther will try and liquidate the inventory, possibly at discounted prices. (They will first poll the buyers to see what the community would like to do with the inventory.) This has also happened and you can read more about the specifics here.
Kickfurther was transparent in also sharing that they had a couple of fraud instances in their first few months of operation, and in those cases they either refunded users a portion of their contributions or had a lawsuit where the Brand filled a settlement fee which was sent back to the users. Since then, their verification and qualification of the brands has increased with new verification checks to protect their community. You can read about their verification process here.
While it seems cancellations of Kickfurther contracts are rare, they do happen. Basically, there are options to get paid, but you'll likely receive less than you originally contributed.
Reddit users have been tracking the status of various offers on the platform. You can find the statistics here: Kickfurther Troubled Offers. As of writing this review, Kickfurther has seen:
- 58.8% of listing completed satisfactorily (200 offers)
- 18.8% are ongoing satisfactorily (64 offers)
- 14.7% are listed as troubled, meaning they are behind on payments (50 offers)
- 7.6% of listing were canceled (26 offers)
Of the canceled listing (there are 26), the following has happened:
- 6 were refunded (23.1%)
- 3 were partially refunded (11.5%)
- 17 are unresolved (65.4%) – This means Kickfurther is still working to try and recoup something from the Brand
The bottom line is that you need to be comfortable with any contributions you make and realize that you could lose money. You also need to be comfortable with the risk involved, realizing what the margins are.
Getting Started With Kickfurther
Kickfurther is an innovative way to partner everyday individuals to small businesses. While there can be upside to buying inventory with Kickfurther, it’s always best to do your research and slowly test the waters. And remember, you're just helping fund inventory. And there is a specific Co-Op profit margin for each company. This won't make you huge money, but it has the potential to earn you a nice amount of profit in a relatively short period of time. However, remember that the risk of every contribution could be getting $0 back. So, ask yourself if the profit margin is worth the risk over that short period of time.
After that, you’ll need to decide how you want to contribute. You can do this by choosing companies you believe in or by relying on past data (preferably both.) Either way you need to feel confident that the company you’re buying inventory from can fulfill their contract. We recommend vetting each company thoroughly on and off the platform before making any contributions.
If you decide to try out the Kickfurther platform, please come back and let us know how everything goes for you!