Rewards and crowdfunding go together quite well. It provides a great incentive for the backer to donate, while it also allows you to gain more backers and get your product in the hands of the customer. If you have never shipped a product before, it can be quite daunting. There are details for shipping that you may overlook and you can find yourself in a bad situation if you are not careful.
In this article, we will discuss how you can ship rewards for your crowdfunding campaign.
Your campaign should be focused on fulfillment. It’s a critical part of the process as margins for marketing and developing a product can be very tight in crowdfunding. For some, the shipping cost can be a make-it or break-it element for the campaign.
There are two options that you may want to explore. The most obvious approach is shipping everything yourself. Depending on the raise mode, either KiA (Keep it All) or AoN (All or Nothing), you can ship out the packages yourself. This, however, won’t work for every campaign. There are some campaigns that may have too many fulfillments to handle. You would need to pack, label, and ship every single package to the backers. Your second option is to use a third-party logistics service (3PL). Such services could help with reducing the cost to get your product out to the customer. You may already have workers that can fulfill such duties, but this might cost you too much in labour for it to be profitable for the crowdfunding campaign. This is when you would use a 3PL service, or when you simply do not have the capabilities to do it yourself.
Let’s take a deeper look into some of the key aspects of shipping your rewards.
Shipping Costs
First, and most important is the shipping cost. You will need to calculate the entire cost for shipping before you start pricing out and selling it online. If you are miscalculating or neglecting the shipping cost of your product, this can cause you and your campaign to go into debt. So it’s important to first understand your shipping cost. You’ll need to understand the different potential shipping costs when for specific locations. It could cost more/less for the United States/Canada than it would be from the United States to Germany. So you would need to calculate the shipping costs for international shipping and understand where you will receive the majority of your donations from.
Shipping Services
Next, you will need to choose the services that you want to use for shipping. This is closely related to the costs. It is recommended that you research the shipping company extensively before choosing to use their services. Be sure to search for reviews of the company before you decide to work with them. Here is a list of the different fulfillment companies that Kickstarter recommends.
Packaging
Optimizing the packaging of any products that you plan on shipping is important. First, you will need to know the exact dimensions of your product and the weight at which it will be shipped. You can then build the appropriate packaging around the finished product. Good packaging can significantly reduce the cost.
Refunds and follow-ups
You need to keep in mind that there are mishaps and unhappy customers. This should be considered when you are building your campaign. There may be clients which receive the product broken or not working which will require a refund + potentially shipping the product back to you.
As mentioned previously, the margin for error is low in crowdfunding. Make sure that your margins are high enough so that you will walk away with a profit.