4.1 Micro-Consignment is a Low-Risk and Flexible Sales Model that can be Used to Identify, Train and Inspire Young Entrepreneurs
Micro-consignment provides entrepreneurs with a “business in a box”. Product research, pricing, and training in sales skills are generally included, thus easing entry into the entrepreneurial world.
At the 2011 GYEOC, Solar Sister, an organization that promotes entrepreneurial solutions to energy poverty in Sub-Saharan Africa, presented their experience with micro-consignment. Solar Sister provides Ugandan adolescent girls and young women with an inventory of solar lamps, training, and support. After one month, women who sell their inventory continue with the program. This provides a “soft hurdle” that helps young people decide if they want to pursue entrepreneurial activity. The inventory serves as a loan—it is a commission-based system so sellers can return product without risk or loss. Entrepreneurs who excel at sales receive a 10 percent commission, others can return their inventory if they are unsuccessful.
Solar Sister found that for the AGYW it recruited in Uganda, profit was not the main motivating factor for female entrepreneurs. Intrinsic rewards and social motivation helped spur entrepreneurs on. Partnerships with strong local organizations dedicated to women, such as the Mother’s Union, facilitated recruitment of AGYW. Solar Sister found that while some women returned their first inventory unsold, citing family challenges or other barriers to sales, others would surmount those obstacles and ask for a second inventory. Women are typically responsible for a full burden of household and community responsibilities including caring for children, managing the household needs such as collecting water and wood for cooking, caring for the garden, helping children with their studies, cooking and cleaning, and if time permits, pursuing income generating activities. Since the Solar Sister business is flexible and allows women to work from home, they can fit it into their already full lives. The difference between women who go on to become successful Solar Sister entrepreneurs and those who choose not to participate is a matter of personal choice. Solar Sister recognizes that not everyone is suited to be an entrepreneur.
Solar Sister’s business model is built on providing opportunity to those who want it without creating a burden on those who don’t want to participate or find they are unable. To give as many women as possible a chance to find out if the program is suitable for them, Solar Sister provides a short trial period where the program supports the women with training and inventory. At the end of the trial period, participants demonstrated success qualifies them to become certified Solar Sister Entrepreneurs. Those who do not qualify (by selling at least a minimum number of products) are allowed to purchase inventory at a discount but do not receive the inventory loan. The trial period allows women to self-select whether this is a program that fits their particular needs and abilities. Those who become Solar Sisters can then move up in the sales structure, selling more lamps and more sophisticated solar products, eventually being trained on installation of solar panels and energy solutions for schools or other institutions. While the organization targets AGYW, several of the most successful Solar Sisters received significant support from their husbands or partners. For more information, see Box 4.2.1.
4.1.1 Bright Ideas: LivelyHoods Builds on Young People's Experience in Sales
|LivelyHoods began in Kenya’s urban slums with the idea of providing loans in order to support young entrepreneurs. They found, however, that young people wanted more experience and less risk. They did not want to take out a loan and fail. Young people also wanted to be part of a group or social network. After further consultation, the organization found that most young people already had some experience in sales. LivelyHoods also knew that while a range of socially beneficial products existed; most consumers in slum communities lacked knowledge and access to those products. LivelyHoods then married a micro-consignment||
micro-consignment model with new market development through iSmart. iSmart, a curriculum LivelyHoods developed, trains and employs disadvantaged youth as sales agents to distribute socially-beneficial products as part of a door-to-door sales force. Products included solar lamps, clean burning cook stoves, and reusable sanitary pads. The program worked with 12 young people but will be expanded to 20.
For more information on LivelyHoods, see www.livelyhoods.org.