Kickfurther’s Consignment Arrangement - Flagged Co-Ops

Written by Melissa Pillion, updated May 2nd, 2024


Kickfurther facilitates Consignment Opportunities or “Co-Ops”. In a Co-Op, Kickfurther’s buyer community participates by purchasing certain inventory and placing it on consignment with the brands requesting funding. As the consignment inventory sells, buyers are to receive the original purchase price of the consignment inventory and a consignment profit. 

Under the terms of the Consignment Agreement, the obligation to provide payment for the consignment inventory occurs as the inventory sells. However, if the Co-Op is canceled and the business fails to return inventory within the cure period, the business similarly owes the buyers for all outstanding inventory. 

For each Co-Op, the businesses estimate the timeline they believe it will take to produce the consignment inventory, sell it, and provide payment. While this is merely an estimate, if a business fails to meet that expectation, the Co-Op can become flagged (as set forth below).

During the course of a Co-Op, businesses are required to provide sales reporting detailing each piece of consignment inventory sold. This allows Kickfurther to determine the amount owed by the business for the sales of the consignment inventory and to invoice the business for the same. 

Getting Flagged

If a business fails to submit a sales report, fails to meet its sales expectations, or fails to provide any payment for the consignment inventory when due, then the Co-Op will be “flagged” to buyers. Once a Co-Op is labeled as flagged, buyers can vote to cancel the Co-Op.Kickfurther realizes the importance of reviewing flagged Co-Ops and may take a number of actions once a Co-Op becomes flagged. For instance, Kickfurther may take any of the following actions on a flagged Co-Op, depending on the circumstances:

  1. Completing a digital or physical inspection of the business’s inventory and sales history;
  2. Sending a demand letter to the business demanding the cure of any outstanding breaches within a certain time frame
  3. Auto ACH withdrawals from the business’s bank account to cure any amounts owed for consignment inventory
  4. Declaring all inventory sold if the business continues to fail to report sales or provides inaccurate sales reporting, in which case payment becomes due immediately 
  5. Expanding the UCC lien on the business to cover all assets of the business
  6. Sending out notice of assignments directing third-parties to direct all payment payable to the business to Kickfurther
  7. Proactively placing the Co-Op balance and any associated personal guarantee  with a collection agency if the business continues to be uncooperative in curing any contractual breaches  


Under normal circumstances, businesses are expected to post an update to their Buyers once every thirty days.   If flagged, however, businesses are required to provide a Buyer update every two weeks.  

Canceling a Co-Op

Buyers can vote to cancel a Co-Op if it is flagged and they have lost faith in the business’s ability to complete the Co-Op within a timeframe it deems is reasonable. The cancellation vote is located on each Co-Op’s status page.


Buyers have the option of casting and retracting their vote up until the point the vote surpasses 50%. Each Buyer’s vote is weighted by the amount of inventory that such Buyer purchased in such Co-Op.

If the vote surpasses 50%, the Co-Op is considered “Canceled” and will be subjected to Kickfurther’s cancellation policy. Kickfurther notifies the business of the cancellation with a formal notice. This notice informs the business that it has 15 days to provide payment in full, return unsold inventory (while still paying all amounts owed for prior sales), or choose a combination of those options. If the business does not respond to the cancellation notice, then Kickfurther will place the entire balance due with a professional collection agency.

Settlement Plans 

Sometimes businesses will propose a settlement agreement to present to the Buyers of the Co-Op upon cancellation. When Kickfurther receives the settlement proposal, we will present the voting options to the Buyers for their vote. Settlement votes generally include options to (a) accept the settlement proposal or (b) place the balance with a collection agency.  Each of the options are elaborated upon below.

Settlement Proposal

In the settlement vote, one option for Buyers is to accept the settlement proposed by the business. Kickfurther operates as a neutral marketplace, so Kickfurther will generally present all settlement proposals to the buyers that the business proposes.  Any personal guarantee will survive until any settlement is paid in full, unless the buyers specifically vote to accept a settlement that outlines voiding the PG as part of the agreement even if the business does not pay.  Any available settlement proposal can be found on the Co-Op’s status page.


Another option in the settlement vote is to place the balance with a collection agency. Generally, collection agencies will try to collect the balance due on the Co-Op and any accrued fees. If there is a personal guarantee associated with the Co-Op, then the collection agency will attempt to recoup from the personal guarantor as well. Some possible outcomes that may occur are that the collection agency may: (a) decide to take legal action against the business and/or the guarantor, (b) negotiate a payment plan directly with the business owner or business, (c) secure a settlement proposal from the business or business owner which will be put to vote, or (d) decide to close the account if recovery does not seem likely.

Timeline of Settlement Vote

Buyers expect that Kickfurther has given the business 15 days upon the cancellation to present them with a settlement proposal or the balance/inventory due. This time may be extended if good faith efforts are being made to provide a resolution. If Kickfurther receives a settlement vote proposal from the business, Buyers will receive a dashboard notification and email announcing the vote. 

Defaulting on the Settlement Payment Plan

Kickfurther has an internal accounts team that works with the business to track their settlement payment schedules to help ensure that the business provides its settlement payments on time. 

Kickfurther provides a cure period window of 15 days to provide payment if the payment is missed. If the business does not provide its settlement payment within the window, then Kickfurther may place the entire Co-Op balance plus any accumulated fees with a collection agency. If there is a personal guarantee  associated with the Co-Op, then Kickfurther will also place the guarantor with the collection agency. Typically, Kickfurther attempts to work with the guarantor and business to resolve any issues and return the Co-Op to a healthy status first and refers the matter to a collections agency only after those efforts fail.  


If a business has filed a bankruptcy Kickfurther must pause the collections process. This is because an automatic stay is enacted which prevents any attempting to collect any debt owed. Accordingly, it makes little sense to place any business in bankruptcy with a collections agency and pay a contingency fee on the matter for any payments received from the business when the agency isn't even able to contact the business or take action to collect on the debt. 

Communication Expectations

Kickfurther will post an update to the Buyer dashboard letting them know that a vote has been emailed.  Usually, Kickfurther gives Buyers seven days to submit their vote. After the votes are tallied, Buyers can expect Kickfurther to post the results of the vote and afterward to take certain actions related to the outcome of the vote. 

If the Buyers vote to send the debt to a collections agency, then Kickfurther will not post regular updates to the Co-Op unless there is movement on the placement or a settlement offer is received. Buyers can expect updates from Kickfurther if the agency has specific news about the account. Often during this status there is no news to share other than that the collection agency continues to work the account to the best of its ability.  

If the Buyers vote to accept a settlement proposal, Kickfurther will attempt to reach out to the business, as needed, to make sure they are adhering to the settlement plan and timeline. Updates about any settlement will be posted to the Buyer Page, if needed. 

If you have any questions or concerns, email