Kickstarter Lesson #111: Should You Offer Multiple Copies of Your Product at a Reduced Bundled Price?

24 August 2014 | 51 Comments

One of the common fallacies on Kickstarter that I and many other project creators have succumbed to is doing the same thing that other projects did simply because they did it (and successfully funded).

This happened when I launched my campaign for Viticulture almost exactly 2 years ago. I had all the things I actively discourage now: exclusives, early bird rewards, ancillary reward levels between $1 and the main reward, lots of add-ons, etc.

One element of the project that still leaves me a little puzzled–and that I continue to see on projects today–is a bundled reward level for two copies of Viticulture at a reduced price:

$49 (427 backers): 1 copy of Viticulture + Arboriculture expansion

$79 (59 backers): 2 copies of Viticulture + Arboriculture expansion

I’m sure you’ve seen this elsewhere in pretty much every category on Kickstarter. I’m specifically referring to bundled sets of 2-3 units, not retail or group-buy levels between 6-10 units. Does it make sense to offer 2 or 3 units at a reduced price compared to 1 unit.

To give credit where credit is due, I never even questioned this idea until Dice Hate Me launched their campaign for The Great Heartland Hauling Co. On that project, if you want 1 copy of the game, you pay $25. If you want another, you pay another $25. Simple as that.

Since then, I haven’t offered low-number bundled pricing on any of my campaigns. Some backers have asked for it, but it just hasn’t made sense to me. Today I wanted to explore why I think that (and why I might be wrong).

Pros for Bundled Pricing

  • It gives backers a good deal. Everybody likes to pay less for stuff. As a positive side effect, this could drive up the overall funding and unlock more stretch goals.
  • It encourages backers to share the project. For most products, each backer only really wants 1 copy for themselves. But if there’s a bundled reward, they have an incentive to talk to other people about the project to see if anyone else in their area wants one. Thus it creates organic sharing.
  • For those backers who want multiple copies, it’s easier than making them add on extra money. Add-ons are hard for many backers to understand–it’s a lot easier to just click on a reward level and get what you want. This pro would apply even if backers didn’t get a discount for buying multiple copies.
  • It’s great for international packages sent from within the US. If I want to send one 4 lb package from the US to Australia using USPS, it’s around $55. If you want to send one 8 lb package from the US to Australia, it’s around $60. You can pass on those savings to international backers. Ideally you wouldn’t ship many international packages from the US (or wherever you are), but it’s likely you’ll ship at least a few of them this way.

Cons for Bundled Pricing

  • It doesn’t make financial sense. This is really what it comes down to. If you don’t budget correctly on Kickstarter, you’re going to lose money. The manufacturing cost of each unit is the same, so why would you charge less for a second unit? Do you save money on shipping by combining two products together? Let’s find out.

I use Amazon fulfillment. People use different fulfillment systems, but hopefully by now most people are seeing the value of having a fulfillment company take care of order fulfillment instead of you doing this out of your basement.

For Amazon multi-channel fulfillment (standard-size non-media), you pay the following:

    • Order handling per order: $4.75
    • Pick & Pack per unit: $0.75
    • Weight handling per pound: $0.45/lb

Thus your costs are as follows for a 1-unit, 4 lb package vs. a 2-unit, 8 lb package:

    • 4 lb: $7.30
    • 8 lb: $9.85
    • savings: $4.75

So yes, you save about $5, and you could pass that savings along to a backer. My concern is that it’s such a small amount for a backer to save, but it leaves you less wiggle room for things that end up costing more than you budgeted for. And trust me–things will cost more than you budgeted for.

Conclusion

This has been an interesting KS Lesson for me to write, because my opinion has wavered a bit just by writing out these pros and cons!

I actually think that having a 2-unit bundled reward at a ~$5 discount might be a good idea as long as it fits well into the flow of your reward levels. If you have a core product and a premium option, I would recommend offering the bundled discount for 2 premium options, not 2 core products. For example:

  • $35: product (buy extras for $35 each)
  • $49: premium product
  • $89: 2 premium products

As you can see, I made it a $9 discount (off of $98). I just don’t think $93 is a compelling enough discounted price. It’s not ideal that you’ve created a $4 loss for yourself, but perhaps it’s worth it for the various pros I mentioned above.

***

What do you think? Have you ever backed multiple copies of a product? If so, tell me about your buying behavior–is the extra copy a collector’s item? A gift? For eBay? A split purchase between friends?

51 Comments on “Kickstarter Lesson #111: Should You Offer Multiple Copies of Your Product at a Reduced Bundled Price?

  1. I offered the 2-up bundle on my Manifest campaign because I wanted to encourage sharing (of the Kickstarter but also of the game itself) and I thought it was worth passing on the difference in postage plus a bit. e.g. Here in NZ I can post two games to most parts of the country for the same price as a single game.

    I’ve also backed at the double level recently (Waggle Dance) – to help share the project and to encourage others in NZ on board who may have thought it was too costly.

    I would do it again – I think it’s all positive.

    Cheers,
    Amanda Milne, SchilMil Games

  2. I see people pledging to the 2 copy options so there seems to be an audience for it. If there is an audience for it it can’t be too bad of a thing. It might help spread the word and set up sales after the KS has ended as well. Would there be any stats on sales after a KS has funded and how pledge levels affect sales after a successful KS?

    1. Royce: There’s also an audience for giving away free games, or sweaters with cats on them…I’m not sure that’s a qualifier for a good or bad idea. :)

      As for how reward levels affect sales after a successful KS, I’m not aware of any stats that make a direct correlation between the two. There are too many variables in play.

      1. Sure if we step out of context, then yes everything has an audience ha ha. But pertaining to the blog post, since the 2 bundle pledge has helped projects get funded it doesn’t sound like a bad idea. The issue you seem to have with it is more of a project management problem rather than the pledge itself. If you can build your project to include a discount bundle than it sounds like an effective pledge level since there is a noticible percentage of people who pledge to that incentive. But if you just add it on the page because you think you should then you’ll probably run into trouble. Clearly there were 59 people willing to pledge to your campaign for a bundle so that’s clearly 59 people who liked the option which makes it a viable audience within the KS community.

        1. I think that saying it’s worth it because folk pledge can be slightly misleading. It’s easy to see the number of folk who back, but what about the folk who DON’T back because of the bundle?

          Not just because of a lost bargain, as Smoothsmith exemplifies below, but also because of a backer who gets slightly confused or weary of the multiple tiers.

          I don’t think there’s any good way to measure that negative impact.

          FWIW, I believe it would be negligible and for my currently-running project have made a 4-game bundle to pass on postage savings. <4% of backers chose that option, but I still feel it's worth having.

          1. behroozshahriari: That’s true, it’s tough to measure people who don’t back. I have a feeling it’s negligible. I think it’s very different than, say, an early-bird reward where you feel like you “lost” if you don’t get in on the early bird price.

        2. Royce: I actually don’t think there’s a big issue with doing a bundled reward of 2-3 products (especially after going over the pros and cons in this entry). I think it’s important to keep the reward levels streamlined as MK mentions below, but otherwise it does seem like something that’s good for a project and for backers.

  3. I think I mostly agree. (Kinda like being mostly dead) but Miracle Max to the rescue. I do not do much kickstarters. Simply put I’m not in a hurry to get a game and because of trust. Your kickstarter for the treasure chest was different. The interaction and help in pledging dealt with the trust issue, then the product was compelling along with an add o of coins. This add on was so compelling that I bought two treasure chests…and an extra set of coins.
    I had been waiting for Thebes to come out and while I did not want two copies even at a discount I was very interested whe Alhambra big box was an option. I ended getting 4 games for 100.00. This was the extra that made me comfortable backing along with the reputation of Queen Games.
    My point is I bought Euphoria directly from Jamie after the positive interaction. When he kickstart’s another project I would go the next level if he offered viticulture for instance. I think a discount for 5 or 10 copies might make sence for hobby store backers. Thanks for the thoughts. Kevin

    1. Kevin: Thanks for sharing your backer perspective, and I appreciate your trust in me and Stonemaier. So far our policy has been to offer games we have in stock at a discount during the campaign (but not through the campaign unless there’s a direct relation between the two). Though I think that’s unlikely to happy with Viticulture, Euphoria, or Tuscany, because we’re going to focus on distribution for the retail games instead of keeping them in stock at Amazon. We’ll see–either way, I appreciate your support and input!

      1. Yeah I can see that might hard with your fulfillment model. Really do respect the way you run things. This whole kickstarter thing can really confuse our normal buying paradigms.

  4. It’s a tough, spot for sure. I’m really the buyer for my “group”, so there isn’t anyone for me to really share a second big-box game with.

    I can say that very small discounts do not incentivise me. I’ve walked away from 2 projects recently (one I was REALLY excited about) because the KS was no more than $5 off of a kinda high retail price and “it was gonna be made anyway”. Now, with small, lighter games, like DNA, I have gone for the 2 pack because I’m certain to find someone who’d like to share it with their family.

    This could very well be one of those conditional principles.

    1. Derik: Thanks for your feedback. I definitely see what you’re saying about minimal discounts off individual copies of a game. I think the question here is if a product is already discounted to an appealing level, does bundling it with another copy and offering a $5-$9 discount make it appealing enough for a backer to upgrade to that level?

      1. Yeah, I got you, and I guess I never made it back around.
        I don’t have friends who would buy a heftier game (because of difficulty and depth, not price), so no level of discount will encourage me. Now, if this hypothetical example was levied at a lighter game (Linkage is what I was referring to earlier) – I’d upgrade at the drop of a hat! I know I can find someone who’d enjoy it and I don’t mind giving away a 15 – 20 dollar game.

        1. I think most people just buy multiple copies as a way to further support the campaign. I think they don’t really have specific friends in mind (usually) but just want to help the KS out. They figure they’ll have an extra copy to give as a X-mas present, but I think that’s secondary to them just wanting to contribute more. So if its not REALLY helping you as the creator then there’s no point. I think it helps to have bonus rewards that don’t add anything to shipping and have negligible cost. For example, a Deluxe version of your game that has gold dice. Or a maybe even a personally signed box (though that’s hard if you have third party fulfillment). Or how about some digital rewards–those are essentially free once you produce them. This one is easy for me (video games) but for bored games it could be something like a collection background sounds/music to have on while you play the game. Then people have the option of supporting you for a bit more, get something in return, and the extra money does get eaten up by things like production or shipping.

  5. In Australia, we love bundling, specifically as you do it for minimising the freight charges. Many games will never see the light of day here without such incentives. Marginal discounts, $1-$2 per unit are nice though not mandatory as the great cost is shipping hence we are not looking for additional discounts to the base product, just ways of taking shipping which may start in some offerings at $25 per unit or more to $5 or less. Yes, we will get our act together and jump on 5-10 packs, which usually with social media or BGG takes a week to organise.

    The spinoffs are clear. We have to talk to others to get the economy of scale for shipping meaning the kickstarted product is promoted. We have the potential of getting games into the country which may never see the light of day or a dramatically increased price if they do. It’s win win.

  6. Certainly a good point. I think a lot of times we just do things because we saw other successful campaigns do them–when it very well might be they succeed despite those things rather than because of them. My current campaign is a video game–so a lot of distribution is handled digitally–but there are still physical rewards at certain tiers so this is something to consider for sure.

  7. In essence, isn’t the discounted shipping from consolidating multiple products technically a “discount”? I think you could approach it from that angle at at least not loose your shirt while providing a discounted option to customers. Instead of 1 game costing $20 to ship, it only costs $25 to ship 2 (sans international, obviously).

    1. Kicktraq: Definitely, it is a discount for international backers. We tend to include the shipping costs in the reward level for backers in the US, Canada, Germany, the UK, China, and Taiwan, so it’s primarily those backers who would be enticed by the discount.

  8. Just wanted to add a negative issue with small bundles like this, it can lead to losing backers who don’t feel like its’ worth backing if they don’t have someone to do it with.

    The reason I’m saying this is that recently yardmaster express caught my eye – a single copy would have cost me $9+$10 shipping, and I was thinking to go in for that until I noted that for $21+$10 it was possible to get 3 copies, so ~$10 each. Fantastic! So I asked around and realized I couldn’t find 2 people to share it with…Great…so I have to pay $9 more! Well..pass.

    I know it’s a petty example considering the small cost, and if I was a bit more comfortable with how much I’d been spending that month I would probably have just got a 3 pack and worried about the others later, but I thought I’d mention it as a matter of relevance ^^.

    (I’ll add that it bothers me far less for large bundles, as it’s easier to appreciate the impact it has to buy that many at a time).

  9. Hi Jamey- I am trying to do different bundled discounts with my Kickstarter campaign this week. I like the idea of giving backers a slight discount in exchange for the discount I’m getting on my end for lower shipping cost per unit. Both sides benefiting in theory. We will see what happens!

    – Jason Huffman

  10. This is quite insightful. I always was for discounts on bundles (for 2-3) copies because I thought that the difference in cost of shipping 1 to 3 copies is very small. At least this is what happens when I go to the post office (strange that fulfilment companies do not follow this pattern).

    Thanks again for the information!

  11. Also, another reason why not to add so many group options in a KS is the fact that it clogs the number of backer options: 1 copy, 1 deluxe copy, 2 copies, 2 deluxe copies, 1 deluxe+your face in a card, etc etc

  12. What I find especially interesting about this article is how your opinion changed even as you wrote the article. It’s good for people to recognize that there are pros and cons to almost every strategy, especially since it is usually difficult to measure the true impact of a single decision on the overall success of a campaign.

    I’m curious; did you truly feel after writing this article that offering multiple copies at a reduced price could be so beneficial that it’s worth taking a loss to do so? Do you believe this would generate a positive return by making the campaign more popular and visible, thus attracting more single-copy backers? Or is it simply that a multiple copy reward would not be appealing to backers at all if the savings did not seem significant?

    1. Clayton: That’s a good question. I’m not a fan of subsidizing or taking a loss at all on Kickstarter. But in the example I gave at the end of the post, I show a $4 reduction in price beyond the cost savings of consolidated shipping. The reason I did that is because I don’t think $94 vs. $99 is a compelling enough price point for people to upgrade their pledge from 1 copy to 2. While writing the post, I determined that the pros of the bundled rewards are good enough that it’s worth taking that $4 reduction.

  13. For international backers, there’s sometimes a few “hidden” advantages to the multi-pack: Customs fees. When you get hit with them (Canada is nowhere near as bad as others), you get hit with the normal taxes (meh), but also customs surcharges – the fee for whatever brokerage to actually process the paperwork. I’ve paid $30 on a $40 game before. Minimizing that extra fee is HUGE for me (I want my money to go to promoting the game, not paying for whatever shipping company is in use). Yes, the fee isn’t coming from you, but someone has to pay for it…. don’t they? Or do you have connections which deal with all the various import / brokerage / VAT Surcharges?

    1. Trevor: Yes, I think that’s particularly important when US creators (for example) ship from the US to Canada. That’s why I’m a big advocate of shipping pallets of products directly to fulfillment centers in Canada and ship from there to individual backers to avoid customs altogether for Canadian backers.

      1. Ahhhhhhh, didn’t realize that also dealt with customs – I know that for myself, getting hit with customs fees was pretty much a lottery (I never win the good ones). For other countries, if a project isn’t using fulfilment centres (why wouldn’t they? Extra hassle? Cost? Putting the frustration on the backer vs the creator?), or it’s not feasible (smaller shipments to foreign countries, no fulfilment centre available – eg: 5 copies to Antarctica), you’re back to “Expensive to ship there / potential lost customer”.

  14. I don’t think it works for your fulfillment methods, but internationally it can make more sense (though not if two copies will be over the threshold for duty and VAT).

    Been thinking about international shipping recently (living in the UK) and especially about early birds in relation to that… possibly a future experiment here:

    See, I really hate early birds, really, really dislike them. And I was trying to decide why as it’s not entirely rational. And I think part of it is to do with shipping. So it wouldn’t apply in your case (where shipping is free to the UK) or the worst case (where things are shipped direct international, and you pay a huge premium plus VAT. In most cases, these days, you’re paying $10-$15 premium for UK shipping, which is entirely reasonable (less so if it’s being used to subsidise other international shipping but that’s a different moan).

    So if I see a project, and it’s $60 shipped to the US, add $10 for UK shipping, that sits okay with me. But if there is then an early bird $50 level that has gone… at that point I’m paying a $20 premium. Sure, it’s made of two different components, but overall I’m paying $20 more than someone who lives in the US and got in early. That’s a third of the price of the game. Suddenly it really rankles.

    I do wonder if there would be a way of arranging rewards to try and counter this. So:

    a) early bird $50, shipped to US only
    b) $60, unlimited, EU/US/CAN shipping included

    You’d have some early bird backers in Europe annoyed they didn’t get a deal, but since most backers will be US anyway, it shouldn’t hugely affect the campaign.

    Sorry for swerving vaguely off-topic, but was just curious as to your thoughts, I could well be barking up the wrong tree but anecdotally I’ve seen more European backers get wound up about early birds, and wonder if it is down to that feeling of ‘being screwed twice’.

    1. Dean: I like your creativity, and I can understand your frustration. I think, though, that any type of backer doesn’t like to be excluded from any reward level. I don’t think people would respond well to it.

      Perhaps the simpler solution is simply not to do early birds. :)

  15. For Conquest of Orion, I offered a single game and a bundle of 4 (with discount). Surprisingly, everyone who went in for the 4-pack was a US backer. I thought it would be the opposite.

    However, I had enough requests for a second copy that I allowed people to get another copy as an add-on and at a discount. These were mostly people that had backed at levels that let them name things, so I wasn’t surprised at that.

    My primary motivation was to sell as many games as possible so that I might be able to order more from the manufacturer (a savings for me). The bundle packs helped with that and I was quite pleased that my plan worked out. This is probably true for other small campaigns as well.

    Steve.

    1. Steve: Thanks for your comment–I really appreciate you sharing that data about the 4-pack. I think that probably plays into the idea that regardless of where people are, they like the idea of pulling together a few friends to get more of a deal on something than they would if they bought just one.

  16. As a backer who routinely re-sells games (I have an online store at Ebay), I always looked for bundled copies. Many times the “retailer” option is only for those who own a brick and mortar store. And while that is my dream (and something I am working towards), I don’t fit in that category now. I’m getting to the point financially where I can routinely pledge for 5-10 copies of a game, and in that case I discuss the possibility of a volume discount with the project creator, but when I was first starting out, the bundle options were often a great way to get KS games for a bit less than just pledging for a single copy.

    On a separate but related note, I have noticed that many campaigns offer an Early Bird pledge, and then also a bundled option in which the per unit price is comparable to or less than the EB pledge price. It always made sense to me – EB pledges were to draw in new backers, and the bundle option justified that price point because of the reduced shipping costs.

    It also made sense (to me) from the backer’s perspective: 1) those who missed out on the EB can still get in on the better pricing if they go for the bundle option; and 2) it also allows backers (i.e. me) the luxury of waiting until the end of the campaign to decide to pledge. Backers don’t have to worry about losing a EB pledge slot, and they don’t have to worry about pledging and then forgetting to drop out if they decide not to back it at the last minute for whatever reason. Personally, I would much prefer to accidentally miss out on a KS project if I forget to jump in at the last minute, than to be stuck with a pledge that I accidentally forgot to drop at the end of a project.

    This blog has been eye-opening though. I always assumed that the savings in shipping was more than sufficient to justify a decent bundle discount. If a project did not offer any discount at all for second and third copies of a game, it irritated me and I was less likely to pledge. Now that I know that fulfillment companies don’t offer much of a discount for shipping multiple copies, I can understand why some project creators don’t offer that option.

    1. Michael: Thanks for your insights from the backer perspective. On Tuscany, I was pretty strict about those who qualified as a “retailer,” but I loosened up on the Treasure Chest and just made it a reward level open to groups or retailers. It sounds like that works better for someone like you.

      While I’m still not a fan of early birds, I like what you said here. If you’re going to have early bird pricing, I like the idea of offering a bulk reward at the same price as the early bird. That way everyone has access to that pricing throughout the project instead of those who just happened to stumble upon it at the beginning.

  17. I’ve backed a few games at the multi-level, and in every case it has been because I was able to save a bit of money per copy, and because I had been able to line up enough people to pay for their portion of the Kickstarter in advance of making the pledge. I’ve even backed a foreign campaign at the multi-level to take advantages of both shipping and base costs (Rise to Power) – I’m in the US and it’s a AU-based company. I feel that $5 (on a ~$50 base pledge) is about the right price break for a multi-copy backer level to aspire to. Big enough to look like it matters without being so large that it feels like NOT backing at the multi-level is throwing money away.

    Speaking about Rise to Power…It was one where I looked at the base level ($25 AUD) and the multi-level ($50 AUD for three copies) and said to myself that multi-level is the only way to go, now let me hunt down the other backers I need.

    –Mark Montgomery

    1. Mark: That’s great that you’re willing to put in the extra time to find other people who want to back the stuff you want–as a creator, I really appreciate that! The creator of Rise to Power (Allen) is an active commenter on this blog, so I’m sure he’s happy to hear that you found a way to back his project.

  18. Might this be a better way to do international? People know they are helping you get something created and if they make things easier on you, the chances of it showing up on their doorstep increases.

    So what if you did International bundling? Is it possible to put a link to a page on your site where people can find each other and thus make just one shipment to a very far away place? I know you’ve talked about this before on your shipping page, but what if you said, “Shipping to [somehwere far] is really expensive. Follow this link to create your own ‘buying group’ and save on shipping.” On your site, you let people put up a sign up sheet for their area and then try to only ship to one person.

    Is it possible this extra step loses you a sale? Would this be against Kickstarter’s TOS?

    1. Roberto: Sure, bundled pricing is appealing to non-US backers because they don’t have to pay the shipping fee more than once.

      On Euphoria, I put together a Google doc for backers in various countries to connect with one another. It was somewhat successful, but I found that (at least in the board game space), BGG is already a great platform for people to do that on their own. And by encouraging people to do that, it’s a way for people to get people talking about the game online.

  19. Interesting but I tend to disagree. You didn’t mention customer acquisition costs. You spend money on BGG ads, spend time & thus money to do PR to get more customers. A backer who tells a few friends about it to purchase the bundle is helping you save money.

    In addition, the copies might not have sold without a bundle: many people don’t actively use Kickstarter, don’t have a credit card, or are just not so good with “The Internet”. They may still want the game. Also you sell people who are connected to each other which happens less otherwise because they could play with the same copy. So overall, I think it can help to sell more on total.

    Most copies that you sell after a KS campaign will be sold via distributors/retailers so you will earn much less per copy. So even if a bundle means a slightly lower margin per copy it still has a much higher margin in comparison with a game sold via distributors.

    Groundfloor did it pretty well: https://www.kickstarter.com/projects/michaelmindes/ground-floor-a-business-building-board-game/description

    A con or pro is that you have more reward levels. If you have no premium version or anything else, having just a single reward level might be bad because backers feel they have no choice. Having bundles could help with that. If you already have a few reward levels adding further ones might hurt you because it becomes distracting
    (I think 3 options are generally the best to boost sales, there is a Ted Talk about this: https://www.ted.com/talks/sheena_iyengar_choosing_what_to_choose?language=en#t-317939).

    A small con is that coordinating a bundle takes time and the earlier someone pledges the better (due to signaling).

    Even if it is just 5 $ that people can save, it is rewarding to save 5$ like it is to earn few vps in a game. If one doesn’t risk having too many pledge levels I think having a bigger absolute profit is worth it even if one has a smaller relative profit in the short run.

    An idea might be to limit bundles so they become a bit sth. like an early bird reward but less frustrating if you miss them.

  20. This is a huge question for me right now (for my Kickstarter coming up in 5 weeks). I should have it pinned down but I’m still on the fence about a couple of things. My game will be at $25. I was considering allowing the option in the reward level to add an extra $22 for an extra copy of the game. I know $20 is more tempting, but that’s a huge drop in price. I could just make it another $25, but some deal may be more enticing, and more buys are ultimately important to my goal. Does anyone here have a thought on a reduction as simple as $3 lower? I won’t bundle though, I moved away from that idea to have fewer levels and I am down to 6 levels.

    1. Tiffany: I don’t think you need to reduce the price at all. Many customers who add copies to their pledge will do so to split shipping costs with a friend, so simply by being able to combine multiple items into the same pledge will result in a cost savings for people.

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