About 1 in 10 Kickstarters never ship.
What gives?
Oftentimes, the answer is simple: logistics is hard.
Hard and expensive.
Many creators get so wrapped up in their incredible product that they overlook the logistics of getting it into backers’ hands.
One of the most important things you absolutely have to get right?
Estimating shipping costs.
In this video, we’ll break down the four main factors affecting your Kickstarter shipping costs, and more importantly, we’ll share strategies to keep these costs low, making sure your dream project is a roaring success not just during the campaign, but after it, when it really counts!
My name is Brandon, here on behalf of Fulfillrite.
If you need help shipping your business’s orders, go to fulfillrite.com and request a quote.
We’ve shipped thousands of Kickstarter campaigns and we’re happy to help you ship yours too.
The quote doesn’t cost a thing, so if nothing else, you get some good information about pricing.
Link in the description.
But enough self-promotion.
Let’s dive in and set you up for shipping success!
The 4 Main Factors In Kickstarter Shipping Costs
First, let’s just get this out of the way.
You need to calculate Kickstarter shipping costs before your campaign.
Not during, and certainly not after!
Postage is only part of the cost.
There’s also freight, customs, and order fulfillment costs to consider as well.
Backers are only accustomed to paying for postage, and that means the rest needs to be priced into your product from the get-go.
Almost every Kickstarter creator is going to pay for these four shipping costs, in this order: freight, customs, postage, and fulfillment costs.
Firstly, we have Freight Costs.
These are the expenses incurred while transporting your product from the manufacturing facility to either your location or a fulfillment center.
The variables at play here are the size and weight of your product, and the geographical location of the manufacturing facility.
For example, shipping a massive art installation from China would be more expensive than sending a small stack of stickers from a local print shop.
Next, we consider Customs Costs.
When you’re importing goods from overseas, you might have to pay import duties and taxes.
The cost largely depends on three things: your product’s harmonized system code, which classifies products for customs purposes; the overall value of the product; and the import regulations of the destination country.
Then we have Postage Costs.
Simply put, these are the costs you’ll face when mailing or shipping rewards to your backers.
As with freight costs, the size and weight of the product are crucial, but you’ll also need to consider the destination.
Sending items internationally can dramatically boost these costs.
Lastly, there are Fulfillment Costs.
These include the costs associated with packaging, handling, and managing logistics.
The complexity of your rewards, the number of backers you have, and your fulfillment process can all influence these costs.
To make sense of all these factors, create a spreadsheet and estimate the cost to ship different quantities of items—like 500, 1,000, or 5,000.
Keep track of both total costs and per-unit costs.
How To Calculate Freight Costs
Let’s zoom in on Freight Costs.
These are largely influenced by factors like the shipment’s weight, size, distance, and mode of transport.
The heavier and larger the total weight and volume of your shipment, the more you’ll pay.
The same applies to greater distances and premium modes of transport.
To get a sense of how much freight will cost, reach out to different freight companies, providing them with the necessary details like your shipment’s weight, size, and destination.
Be sure to gather several quotes for comparison—it’s all about finding that sweet spot between cost and reliability.
To do this quickly and efficiently, use online tools, such as Freightos.
This will allow you to plug in your shipment details and get an estimate instantly, which can be a real time-saver!
How To Keep Freight Costs Low
Alright, let’s talk about keeping your freight costs low.
First up, design – consider your product’s weight and size.
If you can, try to make it lighter, smaller – every gram and inch of your product, as an individual unit, matters in the freight world.
Grams and inches turn into tons and full container loads in large enough quantities!
Then, think about bulk shipping.
The larger the quantity, the better your shipping cost.
It’s the economy of scale at play.
If you’re shipping a full container load, it’s typically cheaper than shipping less-than-container loads.
You’ll also want to consider your shipping options – sea, road, rail… They’re usually cheaper than air.
Air might be faster, but it’s significantly pricier.
Finally, consider hiring a broker if you’re shipping thousands of items.
They can help find the best shipping deals for you.
If your Kickstarter is on the relatively small side, you can use a freight marketplace such as Freightos to book shipments on your own.
This helps you avoid the broker fees, and you can usually get away with it when you’re working with a small to mid-size campaign.
How To Calculate Customs Costs
It’s time to talk about taxes.
Specifically, customs.
(Disclaimer: I’m not an accountant.
This is just a quick overview for estimation purposes.)
First off, you need to identify your product’s HS Code – that’s the international standard used to categorize goods for customs.
Think of it as the ID for your product at customs.
Once you’ve got your HS Code, you’ll need to find out the duty rate in the destination country.
Remember, each product and each country has different rates, so make sure to do your homework.
Now, once you’ve got your duty rate, it’s time for some quick math.
Multiply the value of your freight shipment (manufacturing cost + freight cost) by the duty rate to calculate the customs cost.
It’s that straightforward!
So, to keep it short: get the HS Code, find out the duty rate, and then do a quick multiplication.
It’s your formula to calculate customs costs for your freight shipment.
As for handling customs for individual backers, that’s more complicated, and could warrant a video of its own.
But here’s the super short version just to give you something to Google:
If you ship a product from a warehouse in Country A to a backer in Country B, Country B might charge the backer customs, depending on the value of the product and the item being shipped.
You can handle this in one of three ways:
- Let the backer pay the customs bill.
- (Inexpensive, irritating to backers).
- Ship from Country A to Country B, but pay for the customs bill.
- (Expensive, less irritating.)
- Get a warehouse in Country B.
- (Practical for mid-size to large campaigns.)
And that’s all I’ll say about that for now – let’s get back to customs on your freight shipment.
How To Keep Customs Costs Low
How can we keep those low?
First, make sure you fully understand customs regulations.
You want to steer clear of any unexpected charges or penalties that can occur if you don’t follow the rules.
Keeping customs costs low isn’t just about understanding regulations and hiring brokers, it also hinges on meticulous documentation and compliance with laws.
Be diligent when filling out your customs paperwork.
Incorrect or incomplete forms can lead to delays, additional charges, or even penalties, which could be a real setback for your project.
Additionally, it’s essential to ensure your product adheres to all applicable safety regulations and other laws in the destination country.
Non-compliance can lead to refused entry, fines, or even legal trouble.
Short version: don’t give the customs authorities any reason to impound your inventory.
Next, consider bringing a customs broker onboard.
Now, you might ask, “why hire a broker?” Simply put, these folks are like your customs gurus.
They know the labyrinth of customs regulations like the back of their hand and can navigate through it with ease.
This could potentially save you quite a bit of money, especially for larger campaigns.
Don’t forget, every cent saved on customs is a cent earned for your Kickstarter project!
How To Calculate Postage Costs
Let’s get into the nitty-gritty of postage costs.
To start, you need to weigh and measure your product – but don’t forget the packaging and any extra goodies you’re including.
Just like with freight – every gram and every inch counts.
Next, you need to know your shipping zones.
Think of the world as a giant board game, and each region or country is a different zone.
Postal services use these zones to calculate postage costs.
Now you might say “wait – I don’t know where my backers will be coming from yet!” And that’s a good point, since that will affect the shipping zones you use.
Do some research online and within your own tools, such as your email software, to try to figure out where your backers are going to be coming from.
Come with a reasonable estimate such as: “25% US West Coast, 20% US East Coast, 15% US Central, 20% Europe, 10% Canada, 10% Australia.”
Then, once you have that, run a bunch of scenarios within online postage calculators like EasyShip.
Pop in the details – weight, dimensions, and hypothetical destinations.
Once you have the estimates, put them in a spreadsheet and do a weighted average.
So, remember these steps: Weigh and measure everything, find your zone, and use a postage calculator.
With these tips, you can better estimate your shipping costs and make the most out of every Kickstarter dollar.
Remember, knowledge is power when it comes to shipping costs!
How To Keep Postage Costs Low
Keeping postage costs low?
Start with your packaging.
Can you reduce the weight, the size, without putting your product at risk?
Every gram and inch counts in postage, so be strategic, be smart, make the package as lean as possible.
Next, play the field.
Different carriers, different rates.
Don’t be afraid to compare, to look for that best deal for your specific size and weight.
It’s like shopping around for the best bargain, but for postage.
USPS is often cheap, but you’d be surprised how often they get undercut by UPS and FedEx.
Finally, consider hiring a fulfillment center.
We covered this at length in another video, but the short version is that fulfillment centers have deeply discounted rates that individual postal customers cannot access, and that’s often enough to offset the extra costs.
And if you’re in the US and shipping hundreds of orders to regions like the EU, Asia, you’ll want to consider hiring fulfillment centers overseas as well.
They’re closer to your backers, potentially helping to keep those postage costs low.
But be careful!
Calculate the trade-off between money saved on closer fulfillment centers and higher freight rates for multiple smaller shipments.
How To Calculate Fulfillment Costs
Let’s talk about how to calculate fulfillment costs.
If you’re shipping on your own, fulfillment costs will include the price of packaging materials such as boxes and labels.
Easy enough.
If you’re working with a fulfillment center, it’s a little different.
Ask different companies for quotes and make sure you add up their account, storage, and pick-and-pack fees, as well as their postage rates.
Provide the most detailed information you can to fulfillment centers so you can receive quotes that are likely to be more accurate for your situation.
How To Keep Fulfillment Costs Low
If you’ve been following best practices on keep freight and postage costs low, you won’t need to do much else to keep additional fulfillment costs low.
In fact, our advice here is very simple.
If you’re shipping on your own, buy packing materials in bulk from companies like ULINE.
If you intend to work with a fulfillment center, ask for multiple quotes and really scrutinize them.
Every order fulfillment center formats their quotes in different ways, and for that matter, specializes in slightly different services.
So really closely compare quotes.
Final Thoughts
To bring it all together, understanding and controlling your shipping costs is a must for any Kickstarter campaign.
From freight and customs to postage and fulfillment, each aspect is a piece of the pricing puzzle.
Remember, the journey doesn’t end once you’ve created an amazing product, but when that product lands in the hands of your eager backers.
With proper planning, savvy strategies, and meticulous attention to detail, you can avoid any shipping-related shipwrecks.
If you need help shipping your business’s orders, go to fulfillrite.com and request a quote.
We’ve shipped for thousands of Kickstarter campaigns and we’re happy to help you ship yours too.
The quote doesn’t cost a thing, so if nothing else, you get some good information about pricing.
Link in the description.
If you enjoyed this video, please take a moment to like and subscribe.
Don’t forget to slap some postage on that bell so we can express ship new videos to you as soon as they drop.
And last but not least, if you have any questions, leave a comment below.
I will personally answer as many as I can.
Thanks for watching!
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.
