Here’s how to read and understand your contract, including the terms and requirements of which you should be aware of.

The contract outlines the terms of the Consignment Opportunity or “Co-Op.”

Co-Op Specific Details: The contract will detail the Kickfurther fee for each Co-Op, any inspection fees initially withheld for the Co-Op, any fees that may be owed for completing a Co-Op later than estimated, the funding price, option price, and revenue share price of the consignment inventory, and the estimated timeline for the Co-Op, which includes the sales reporting periods and report dates as well as any payment terms on the payments owed pursuant to those reports.

Update Requirement: For all Co-Ops, businesses are required to provide an update related to each Co-Op at least once a month so long as the Co-Op is not flagged and at least every other week should the Co-Op become flagged. 

Reporting requirements: Businesses are required to provide sales reporting covering all of the SKUs in the Co-Op on the schedule set forth in the consignment agreement and, if the Co-Op continues past the expected completion date, these reports shall continue on the same monthly schedule. 

Payment requirements: Businesses pay the Revenue Share Price, which can be found in the contract, for each piece of consignment inventory sold until the Co-Op completes. By paying this Revenue Share Price, businesses are not required to sell 100% of any SKU to complete their Co-Op.

Flag Triggers: A Co-Op will generally be marked as flagged if: (i) for any scheduled payment date, the business makes a payment that, when taken cumulatively with all other payments, is less than the sum of all previous estimated paybacks prior to such date plus 50% of the current estimated payback for such date, (ii) the business does not provide an update and/or an inventory report or payment for invoiced sales within one week of the expected date, or (iii) if the Co-

Op is not completed within fourteen days after the expected completion date.