It’s increasingly common for eCommerce businesses to get their start on a crowdfunding platform - particularly eCommerce product companies. From Kickstarter, Indiegogo, Patreon, GoFundMe, and more, there are a lot of different platforms to choose from when deciding to launch a crowdfunding campaign. Kickstarter and Indiegogo are two of the most popular, but they have some major differences. With Kickstarter (the most popular platform) you set a funding goal for your project and a deadline to reach your goal. You can offer different rewards for different backer pledge amounts. For example, a backer who pledges $25 will get one level of reward, let's say one widget, while a $50 pledge gets a special expanded edition widget and a t-shirt. What's unique about Kickstarter is that if you reach your goal, you get the funds, but if you don't, the funds go back to the backers - they take an all-or-nothing . With Indiegogo, there's a similar pledge and reward setup, but the pledges all go directly to you regardless of whether or not you reach your goal. Be sure to keep this difference in mind when deciding where to launch your crowdfunding campaign.
Kickstarter has raised around $3 billion in total campaign donations and funded approximately 125,000 successful projects
Crowdfunding campaigns are now even used by larger companies that don't necessarily need the funding, but are utilized as a marketing tool to launch products and grow awareness. At its core, crowdfunding is a fantastic vehicle for businesses to fund initial product purchases that they wouldn't be able to otherwise find funding for. It's helped launch a variety of incredibly successful businesses that may not otherwise exist! In fact, since Kickstarter's founding, more than $3 billion has been raised for campaigns and approximately 125,000 successful projects have been funded through the platform. Crowdfunding has asserted itself as a staple in the industry and a tool that will be utilized by eCommerce startups for many years to come. Let's take a look at the typical crowdfunding lifecycle, from idea to fulfillment.
New businesses that opt to get their start via crowdfunding are oftentimes launching their first business venture and may lack prior knowledge or experience in their industry, and almost always are new to shipping and fulfillment. This can lead to a situation where their product price isn't competitive in the market, they can't maintain minimum shipping costs, or they have trouble implementing best fulfillment practices for a premium customer experience. Furthermore, for eCommerce product companies (which we'll focus on here) a successful crowdfunding campaign can lead to thousands of orders waiting to be shipped with nothing more than a CSV file to match addresses to customers to orders. Plus, this could be the first time the crowdfunded entrepreneur has shipped anything other than a birthday present, and they're now faced with coordinating thousands of orders that need to be shipped around the world for as cheap and fast as possible with tracking information and the right packaging to keep the product safe in transit. This leaves our crowdfunding entrepreneur with a lot to worry about! And it can be really intimidating and stressful for first-time crowdfunding ventures to handle the logistics, warehousing, and fulfillment of a wildly successful campaign that exceeded their expectations.
"The fulfillment of crowdfunded products is probably the most important fulfillment you will do as an eCommerce business - it's your physical product's first step into the real world."
One thing most successful Indiegogo or Kickstarter campaigns have in common is that they are usually in dire need of quality logistics and fulfillment solutions, whether they realize it or not. And the fulfillment of crowdfunded products is maybe the most important fulfillment you will do as a business - it's your physical product's first step into the real world and a lot of people are anxiously waiting to test it out. A lot more needs to go into the shipping and fulfillment than just slapping a label on a box. Especially since the customers you're sending your products to are likely going to be your brand's biggest advocates and most vocal critics. A lot of crowdfunded entrepreneurs have a desire to handle fulfillment themselves thinking that it's the best way to provide a quality customer experience, but this can be a very slippery slope. Without proper storage or shipping safeguards you are likely to end up with damaged shipments, lost products, diminished profits and simply not enough space to effectively store your products until they are shipped to your backers.
A crowdfunding fulfillment services business can provide you and your backers with a much more efficient and pleasant fulfillment experience than you're going to be able to provide on your own. A crowdfunding fulfillment service can receive your freight shipments, which are often coming in on pallets, at their warehouse so you don't have to struggle with loading and unloading container trucks of pallets. They can provide tracking for your shipments, and sometimes even help arrange for better transit times if you're partnering with the right 3PL. And the best part about working with a crowdfunding fulfillment service like PackYak is that it's as simple as can be. Once you sign on, you just supply the list of backers, their addresses, and their chosen rewards, and your crowdfunding fulfillment warehouse will pick and pack the rewards and ship them accordingly, giving you faster transit times and lower transit costs. Some other bonuses to working with a fulfillment service is that they can assist with the best packaging choices for your product if you are unsure, and they have a lot of experience in dealing with mass quantities of orders that could overwhelm a small business that just ran a successful crowdfunding campaign.
"A crowdfunding fulfillment service can receive your freight shipments at their warehouse so you don't have to struggle with loading and unloading container trucks of pallets. They can provide tracking on shipments and avoid damaged and returned products due to improper packaging."
Here's the best part - if you choose the right fulfillment center, you don't have to give up that personal touch you want to add to your backer rewards. A crowdfunding fulfillment partner like PackYak is more than happy to use your custom boxes, inserts, stickers, or even personalized notes when fulfilling your backer rewards. A fulfillment service can help provide an additional level of quality control that you may not even know you need, and will avoid common mistakes in shipping and packing that result in damaged and returned products - because nobody wants a crowd of unhappy backers with damaged or lost shipments. Working with a fulfillment services company is completely worth it when you consider the stakes for your business and the level of expertise they bring to the table in warehousing and fulfillment. It's truly the best way for you to guarantee that your products arrive quickly and safely to your backers and could be the start of a long and mutually beneficial relationship. Plus, fulfillment partners help you cut costs in so many ways that in the long run a fulfillment partner is more than worth it when you consider the time and money they free up for your business.
A crowdfunding fulfillment partner like PackYak is more than happy to use your custom boxes, inserts, stickers, or even personalized notes when fulfilling your backer rewards
Any new eCommerce business finding themselves in the above situation would be happy to know PackYak exists to help you bypass any and every difficulty associated with the first, and future, runs of your products. PackYak will accept your goods directly from the manufacturer and prepare them for shipment. Our team will assist turning your raw order data into shippable orders, and you can utilize PackYak's easy to use web dashboard to track the status of shipped orders and give your customers tracking information. Your dedicated PackYak representative will walk you through the whole process, step by step, through a dedicated Slack channel where you can always reach your fulfillment team. With this level of communication and control over your product and orders, you’ll feel like you’re right in the warehouse with us! Reach out to PackYak for more information on how to streamline your next crowdfunding campaign.
That's all for this week's edition of The New Yak Times, tune in next week and subscribe below!