Since 2009, Kickstarter has enabled tens of thousands of projects to receive billions of dollars in funding, allowing people from all over the world to launch successful products and businesses.
Today, though, many crowdfunders on Kickstarter, Indiegogo and other platforms still struggle with a crucial aspect of their campaign: order fulfillment and shipping.
In many instances, shipping rewards to backers becomes somewhat of an afterthought and may not be considered until the campaign is complete and the surveys are sent out. When this happens, it can turn a seemingly-profitable campaign into one that loses hundreds or even thousands of dollars.
5 Important Crowdfund Order Fulfillment & Shipping Tips
Here at eFulfillment Service, we work with crowdfundres of all sizes to warehouse merchandise and ship orders to their backers across the world. Therefore, I wanted to share some advice based on my experience working with crowdfunders over the years. Here are five important tips for crowdfund order fulfillment and shipping…
1. Calculate Shipping Costs Before Your Campaign Begins
This is probably the most common mistake I’ve come across, which is that crowdfunders don’t accurately calculate their shipping costs for the rewards they’re offering before the campaign begins.
When this happens, it may mean that crowdfunders don’t charge enough for the shipping. In fact, on one particular occasion, I worked with a crowdfunder that had invented a new cooler and, because of dimensional weight, the cost of the shipping was incredibly high. The crowdfunder was unaware of the dimensional weight rules charged by FedEx and UPS and, therefore, wound up losing money on every order.
My advice to Kickstarters and other crowdfunders is to do your due diligence and come up with an accurate shipping cost for each and every reward you’re offering. To do so, you’ll need to determine the size of the box/package that each reward will be shipped in because, as in the case of the cooler, dimensional weight may apply and inflate your shipping costs. Additionally, it will be important to research all shipping options, as rates, transit times and dimensional weight rules differ by carrier and ship method.
2. Know Which Countries You’ll Be Shipping To
This one sort of goes along with the first tip, but I wanted to make specific mention of international orders because this is where you can really lose money.
Kickstarter and Indiegogo are well-known throughout the world and it’s not uncommon to get pledges from the U.S., Canada, Australia, UK, Germany, and many other countries. In fact, the most successful campaigns are supported by people from around the world.
Heading into your campaign, make sure you know which countries you’re willing and able to ship to, and determine the cost for shipping each reward to those countries, which, again, should include dimensional weight rules, and bear in mind that those rules are different for shipping overseas vs. shipping within the U.S.
In addition to knowing the shipping costs and appropriately pricing your products/rewards based on those shipping costs, you’ll also want to know the duties/taxes and determine if your ship method will be delivered duties paid (DDP), meaning the customer will NOT owe for duties at the time of delivery, in which case you’ll want to factor in those costs up front, or if they’ll be delivered duties unpaid (DDU), which means your backers will be charged duties when they receive the product, so you’ll want to make that clear to them on your crowdfund page.
3. Limit the Number of Rewards & Order Variations
When you’re developing your crowdfund campaign, it may seem like a good idea to offer several rewards with many different variations. After all, your backers may want choices, right? My advice: don’t.
It’s important to remember that, when it comes to the order fulfillment and shipping of those Kickstarter and Indiegogo perks, the more order variations you have, the more complicated and costly it will likely be.
For instance, if you’re using an outside fulfillment company like eFulfillment Service, you will typically get a better rate on the pick/pack if there are fewer order variations, as the order processing becomes easier. This may apply to other areas, as well, such as receiving. Additionally, this simplicity may reap benefits even earlier in the process, such as cost savings with your supplier if you’re ordering a fewer number of widgets in greater quantities.
I have seen many Kickstarter and Indiegogo campaigns that have numerous rewards, and, when you look at where all of the pledges come from, it’s generally from a very small handful of perks. Keep it simple, focus on the product you’ve created, and leave out all of the other junk.
4. Determine Options for Bundling
Another way you can save money on crowdfund order fulfillment is through bundling. For instance, let’s say that you invented a cool new puzzle with a twist on the Rubik’s Cube, and you’re raising funds on Kickstarter.
For simplicity, and to help cut costs, you’ve decided to limit the number of reward variations and have gone with these options….
— One puzzle by itself
— Two puzzles by themselves
— One puzzle + one display stand
— Two puzzles + two display stands
Here, you have two products and just four order variations to ship to backers. If you can find a supplier that can manufacture both products, that’s great. In that case, you may be able to have your supplier pre-bundle the puzzle with the display stand based on the number of pledges for both products. Depending on the cost for that bundling, it may ultimately save you money as it would make the order fulfillment more streamlined, whether that’s handled in-house or outsourced to a 3PL like eFulfillment Service.
5. Consider an Outside Fulfillment Company for High Volume Campaigns
Sure, I’m biased. After all, I work for a fulfillment company that handles a lot of crowdfund jobs. That aside, though, the reason I have it on my list here is that fulfillment companies can save crowdfunders a lot of time, money, and headaches.
I have spoken with many crowdfunders that attempted to handle the order fulfillment with previous campaigns they’ve launched, including shipments within the U.S. as well as to Canada, Australia and several other countries. Each time, I hear the same thing, which is that they grossly underestimated the time it would take, how complicated shipping can be (especially with international orders), and how to simultaneously maximize speed and cost-effectiveness given all of the ship options out there.
If you successfully funded a campaign and it only took 50 backers to do so, sure, you can probably handle that and there’s no reason to outsource the order fulfillment. On the other hand, if you have 5,000 backers, even if you feel you could pick, pack, and ship for less money than a crowdfund fulfillment center would charge, in the end, you may ultimately pay a whole lot more, as your shipping rates will likely be more, and you may deal with a lot more issues, angry customers, and refunds if you’re not able to get those orders out quickly.
To sum things up, my advice here is to spend a good chunk of time on the order fulfillment prior to launching your campaign, as again, I’ve seen it be an afterthought on too many occasions and result in big issues. Also, make sure to dig into the details, as it’s not uncommon for crowdfunders do some initial homework to try to get a ballpark of the fulfillment rates, but they often miss details that ultimately cost them in the end.
If you’re a crowdfunder that may need outside help with order fulfillment…or if you just want to chat and bounce some ideas off us…let’s chat!