On April 28, 2009, Kickstarter was born. The site’s promise was simple but ambitious – to provide a place for independent creators to launch their creative projects. Kickstarter has seen profound success on a scale no one could have anticipated. Indeed, last week was Kickstarter’s tenth birthday. After 10 years of Kickstarter, it’s time to look back and see what the platform has taught us.
Ten years is plenty of time for a platform to grow and creators to learn. We at Fulfillrite, especially, have a vested interest in helping prospective crowdfunders succeed. The pitfalls that become project creators even now tend to be same basic ones.
Before you ever launch a campaign, you need to carefully think through what will happen once you succeed. To help you get started, we’ve come up with 10 lessons to help you succeed after funding a Kickstarter campaign.
1. Account for the delay in payment processing.
After a Kickstarter campaign first succeeds, you don’t receive all the money immediately. Every single backer needs to have their card charged. This takes time – about two weeks in most cases. If you erroneously plan to start production immediately after a Kickstarter campaign succeeds, then you will likely be disappointed when you learn you have to wait.
2. Be prepared for transaction fees, dropped pledges, payment errors, and returns.
It’s well-known among Kickstarter creators that Kickstarter itself takes 5% of the funds upon success of a project. However, many people forget about the 3-5% transaction fees associated with charging credit cards. These fees can add up quickly. In total, 8-10% of your funds will be spent on fees.
That’s not all, though. Some backers will inevitably fail to update their payment information. This can cost you some funds on the margins as well. Others will attempt to back out after the campaign is over. Last but not least, some people will want to return your rewards in exchange for a full refund.
All totaled, you should set aside up to 15% of your funding for various unexpected expenses.
3. Don’t forget to collect phone numbers.
For customs purposes, you need to collect the phone numbers of international backers. Failure to do this will lead to delays in shipping, which many customers will find irritating. This is easy to overlook.
4. Don’t forget to collect email addresses.
Similarly, once a campaign ends, you will have a chance to collect email addresses for future marketing purposes. Kickstarter surveys give you a great opportunity to gather emails with consent. Be careful when you do this, though. You are obligated to follow the guidelines set by the GDPR before sending marketing emails.
5. Make sure your product complies with the law.
Every product is different, as are the rules and regulations associated with creating them. It is your responsibility, as a Kickstarter creator and a business owner, to do your due diligence. Failure to do so could lead to your goods being confiscated by customs (or worse). Particular points of concern include materials and child safety.
6. Choose the right manufacturer.
No matter how beautifully you execute your Kickstarter campaign, a bad manufacturer can ruin it. Poorly manufactured goods can be so low quality that you have to throw them out entirely. Before making a deal with a manufacturer, make sure you research everything and do a reference check.
Even if the products manufactured are of high quality, you can still run into issues. Manufacturers often use overly optimistic estimates of production time. That means if you rely on their word alone, you can end up making promises that you can’t keep because you’re left waiting on them to complete manufacturing. Again, a simple reference check is a great way to guard against this common issue.
7. Hire a good freight forwarder.
Manufacturing can sometimes happen within the boundaries of the same country a Kickstarter creator resides in. It usually does not, though. That means someone needs to coordinate the entire process of shipping large, heavy shipments of goods from one part of the world to another. This means arranging transport by rail, road, air, and/or sea as well as clearing customs.
Freight forwarders are companies that handle all these tasks. A good example is our industry partner, Shapiro. While you can arrange all of this on your own, it’s often far too difficult, time-consuming, and error-prone to be worthwhile. Having qualified professionals backing you up here goes a long way.
8. Remember that clearing customs takes time and money.
Speaking of customs, it is neither free nor easy to clear them. Customs agents have two main responsibilities: keep residents of the receiving country safe and levy the appropriate taxes. If your products do not comply with rules or regulations, customs will hold onto them and you will have to take further action to receive your inventory. This is time-consuming and can be prevented with research.
On the subject of taxes, either you or the supplier will be paying taxes to clear customs. It depends upon the terms of your agreement. If taxes fall on you, though, make sure you have money set aside to pay them.
9. Don’t try to fulfill orders on your own.
Many creators do not fully appreciate the complexity of filling orders. While it is possible to receive your own inventory and fill orders via USPS, FedEx, or another carrier, that doesn’t make it a good idea. It is faster and easier to send inventory to a fulfillment company such as Fulfillrite who can fulfill orders on your behalf. It’s often cheaper, too, since companies like ours can negotiate great rates on postage and save a lot of money by buying packing supplies in bulk.
Trying to fill hundreds or thousands of orders from your home can take days or weeks of concentrated effort. A lot of people have neither the time nor the inclination to do that. This can create a single massive bottleneck for the unprepared.
10. Make sure the entire process is repeatable and scalable for future projects.
Finally, many Kickstarter creators return to the platform to fund a new project. That means success is not just measured by the ability to make one project work, but rather, to make multiple projects work. After a first Kickstarter campaign is fulfilled, whether on-time or not, the creator needs to make sure the process is repeatable in the future and can scale to larger projects.
You’ve done everything by the book. Your Kickstarter campaign is almost ready to launch.
You made a great product. Built an audience. Set up a campaign page.
But how do you ship it?
We put this checklist together to help you get started. It's free.