Building Small Businesses Through Online Marketplaces and Creative Funding Sources

This post was contributed by Sarah Misyak, a graduate student at Virginia Tech and a member of the AFP management team.

The AFP is working with partners from across the food system in West Virginia and the Appalachian region of North Carolina and Virginia. Some of our partners are working directly with small businesses. For these producers, food entrepreneurs, and artisans one of the biggest challenges may be accessing financial capital.  New and creative platforms, marketplaces and funding sources are available on the internet.  For those of you that are looking for resources to start or grow a small business, Etsy, and the Etsy + Kiva partnership may useful.

Etsy is an online marketplace of over 15 million buyers and businesses whose mission is to “reimagine commerce in ways that build a more fulfilling and lasting world.” Etsy provides access to buyers for crafters, artisans, or collectors selling handmade creations and vintage goods. There are no membership fees and it only costs $0.20 to list an items for 4 months or until it sells.  They also collect a 3.5% fee on the price of any sold item. In August of 2013 over $109.1 million were sold by the Etsy community.

Not sure if your product would be a good fit?  Check out Etsy’s Food Market here or browse their Outdoors & Garden section here.

If you have an idea for a business but need funding you may want to check out Etsy + KivaKiva is a non-profit organization with a mission to connect people through lending to alleviate poverty.  According to the Kiva website, they make small loans around the world, providing fair access to affordable capital for people to improve their own lives.  Kiva accepts donations as little as $25 from individuals interested creating opportunities world-wide.  The loans are not donations and are almost always paid back.

The goals of the Etsy + Kiva partnership are to: 1) allow artisans to start or grow independent businesses through Kiva’s financial services while 2) connecting them to Etsy’s global marketplace.

Through this partnership you can apply for the funding you need to start your business on Etsy or you can support creative entrepreneurs by providing financial assistance through Kiva.

If you choose to help out an entrepreneur via a Kiva loan you will not receive interest on your loan.  When repayments are deposited into your Kiva account you receive email updates.  From there you can decide whether to re-loan that money withdraw those funds.  You may even be able to receive updates about the business you have chosen to support.  If you are interested in helping but do not have extra financial capital you or your organization can become a trustee.

In order to receive a loan, through the Etsy + Kiva partnership entrepreneurs must be endorsed by a trustee.  Trustees are not financially tied to loans.  They review business and personal finances, vouch for artisan’s characters and publically endorse them on the Kiva Zip website.

Next week, I will explore crowdsourcing and crowdfunding as another alternative business strategy.

Sarah Misyak is a graduate student in the Department of Human Nutrition, Foods & Exercise at Virginia Tech.  Her research is focused on barriers to local food access for low-income populations and the impact of the local foods on diet quality.