Launching a rewards-based crowdfunding campaign can be a low risk way to test the waters and raise capital for the first iteration of your product or startup company. Being well-prepared in all aspects of your campaign can go a long way in helping you start a successful business, but crowdfunding does come with some responsibilities that need to be met.
Most backers realize that by supporting crowdfunding projects, they are essentially investing in ideas, and that things might not necessarily go as planned. Still, you are expected to do your best to deliver, and creators who fall short often come under fire from their backers, the media and platforms.
It is true that fulfillment problems do arise and communicating honestly can help you get through them. Just know that handling issues the wrong way can be harmful to your reputation as a creator or business. Here are a few of the most common crowdfunding reward fulfillment problems, so that you can plan ways to avoid them ahead of time:
1. Promising too much
Popular crowdfunding platforms like Kickstarter and Indiegogo have attracted tons of creators who want to introduce the world to amazing new products.The problem is, sometimes the features they promise are too good to be true. As a creator, make sure you only promise what you know you can do, instead of having to explain to backers why you can’t later.
Examples of far-fetched projects are pretty common, with many of them even being suspended by the platform they launched on before their campaign even ends. Manufacturing issues are what caused Bonaverde to dissolve, a company that launched three crowdfunding campaigns for their roast-grind-brew coffee maker that never made it to backers.
As a general rule: start with something simple that you know you can produce. If your project is really successful and you start growing your capital, you can always test later to see if you can add new features and launch a newer, better version of the product.
2. International shipping issues
Figuring out how to include the cost of international shipping to your crowdfunding campaign can be a hassle, and if it isn’t done properly, it can literally cripple your chances of success. Crowdfunding platforms usually give you the option to ship within your country only or to ship anywhere in the world, but shipping anywhere in the world can be expensive and time consuming.
Still, most Kickstarter and Indiegogo campaigns you see do ship worldwide, so how do they do it? It all depends on the amount of experience you have and your willingness to search for the right option for you.
Shipping around the world from the US can be very expensive, but there are options for bigger projects that can’t handle it on their own. Research reward fulfillment companies like BackerKit or Fulfillrite and e-commerce services like AmazonGlobal to find the best option for you.
3. Failing to calculate costs for packaging and postage
Cost isn’t only an issue for international shipping. You need to consider the cost of packaging and shipping all of your rewards regardless. Understanding how to calculate these costs (and rounding your estimates up if you are unsure) can help you make sure that you don’t run short on your budget for fulfillment.
The first step in this process is finding out how much your packaging is going to cost. Once you know that, you can use UPS or Fedex online calculators to calculate postage (remember to figure out average costs for different countries if you are doing international shipping!).
4. Unexpectedly high demand
Let’s say you come to a deal with a manufacturer and your crowdfunding goal is to reach their minimum order quantity. After you launch, your project goes viral and your manufacturer can’t handle the demand. Now you have to find someone who can. Save yourself from this scenario by planning for it ahead of time and having a backup plan.
Having a manufacturing plan (and contingency plan) before you launch can make you more prepared throughout the duration of your campaign. If you see that your demand is going to be higher, you can go to your manufacturer early and try to find a solution before you are already running late on shipping and need to find an alternative fast.
5. Offering too many options
Having a variety of rewards for different pledge levels sounds like a great idea, but beware of the headaches it may cause when it comes to fulfilling them all.
In addition to your main rewards, dealing with things like t-shirt sizes and other small rewards can set you back more than you think. Having a low pledge option is nice, but it doesn’t always have to come with something. Many just include email newsletters, for example.
If you do want to include a smaller reward, make sure you include that in your budget and that these rewards aren’t going to take too much time to put together – you want to focus on getting your main rewards out to backers.
Conclusion
Knowing about the most common reward fulfillment problems that affect crowdfunding campaigns can help you avoid them, or at least be better prepared if any of these issues become a problem during your campaign.
If you are deciding whether or not to handle fulfillment yourself or outsource fulfillment for you crowdfunding campaign, check out a comparison of each method here.
