17 February 2013
UPDATE 6/24/2013: I’ve posted a much more detailed, up-to-date entry on Kickstarter shipping here. It’s still worth reading the entry below, but the new entry is where all the crucial information can be found.
Before you launch your Kickstarter campaign, you have to make a few key choices about shipping. Although Kickstarter projects can now originate in the United Kingdom in addition to the US, I’m going to write this from the perspective of US creator.
Let’s get the easy one out of the way first: the standard of Kickstarter projects is that shipping is included in the reward levels (see more about reward level strategy here). That doesn’t mean that domestic shipping is free; rather, it means that you need to create your reward levels so they cover shipping.
Shipping will vastly differ based on the project, so you’ll have to calculate those costs yourself. However, it is incredibly important that you calculate shipping costs based on the most expensive shipping could be for you. Assume that you’re going to achieve every stretch goal. Then use the size and weight of that version of your project to estimate the shipping cost per unit. For example, if you’re shipping USPS (domestic or international), there’s a HUGE difference in first class postage if your package is less than 4 pounds versus more than 4 pounds.
Also, if you have flexibility in determining the size of your product, configure it so it fits into one of USPS’s flat rate boxes. You might find a better deal through a different company or if your project weighs less than you thought, but at least you have the flat rate option if needed.
You also need to factor in any add-ons for some shipping levels. Most backers might be getting a hardback copy of your book, but 50 of them might sign up for a life-size portrait of you writing the book (who wouldn’t want that?) The shipping cost will be very different for the add-on, especially if you decide to ship it separately.
I’ll advocate fulfillment centers in a second, but if you decide to pack and ship all of the domestic shipments yourself, you need to include the cost of shipping materials in addition to postage for your per-unit costs. Skim through Uline and look at the cost of boxes, tape, bubble wrap, printing stickers, etc. You will need all of these things.
Last, as I was wisely told by fellow project creator Jason (his project, Deck of Thieves, is currently on Kickstarter), it will take a long time to assemble all of those boxes, so order them well in advance so you can have them assembled before your product is manufactured.
International shipping is a lot trickier than domestic. You still need to consider a lot of the above factors, especially if you’re packing and shipping the product yourself. The difference is that with international shipping, there’s a good chance that you will encounter situations where the actual shipping costs is the same as the cost of the reward. That’s a huge deterrent for international backers, so you might have to adjust your costs and take a loss on international shipping like we did for Viticulture.
That doesn’t mean that you can’t be smart and selective about how you take that loss. For example, the map on the left shows the shipping costs for Minion Games’ Hegemonic Kickstarter project. Although it’s a very heavy game, they wisely sized the game to fit into a medium USPS flat-rate box so they would know the exact cost of shipping per unit. Note that shipping to certain foreign countries is more expensive than shipping to others.
When you determine your international shipping costs, you have a choice as to how you present that information to backers. Here are your options with pros and cons:
- Have backers manually enter the additional cost of shipping: Last November, Kickstarter added a feature that lets you list one international shipping price. My understanding of this is when an international backers selects a reward level that requires shipping, they are prompted to add the additional amount for shipping. This number is also visible under each reward level on the right sidebar. This is my preferred option because it reduces the number of reward levels compared to the second option–no need to make backers weed through reward levels that have no application to them. The downside is that you (the project creator) have to track down any backers who slip through the cracks and don’t pledge for shipping in addition to the reward. Thank goodness for PayPal after the project is over.
- Create reward levels for each type of shipping: Some projects opt to include several tiers of shipping as reward levels. For the most part this solves the data problem of tracking international buyers, but you might still have to track a few down if they pledge to the domestic level without realizing it. Perhaps it’s not a bad idea if you only have a few reward levels, but I wouldn’t recommend this option. (I’m open to other opinions in the comments, of course.)
Overall, international shipping is the source of much consternation for creators and backers alike. See the modest proposal at the end of this post for some thoughts on how to solve this problem.
Before I launched Viticulture, I had it in my mind that Alan and I would pack and ship every game that we sent to backers. That’s what Kickstarter is all about, right? Rollin’ up your sleeves, gettin’ your hands dirty, workin’ through the night.
All of those things are true. But shipping 50 boxes is a lot different than shipping 500. Or 1,000. Or a gajillion (a “gajillion” is anything over 50, really. Because that’s what it will feel like).
You can save time and money by finding a fulfillment company to distribute your product to your backers. There are plenty out there, and ideally you’ll find one in your city. I’m working with Amazon Fulfillment for domestic shipments (they don’t do international). If you have any other suggestions, feel free to leave them in the comments.
International Shipping: A Modest Proposal
In the board game space on Kickstarter, international shipping is one of my biggest concerns. If any project creators have cracked the secret code, let me know, but here’s what I see: I see that both creators and backers suffer financial drain from international shipping. For example, Viticulture will cost $47 per game to ship to Europe, and even more for South America, Asia, and Australia. I charged my international backers $20, so added to the $8-10 I’ll spend on shipping for each domestic backer, that’s nearly a $20 loss on shipping per unit. The backers suffer too–not only are they spending $20 on a $49 game, but they might also have to pay customs and fees when they receive the game.
There must be a better way. Especially when 30% of all Viticulture backers are abroad, and considering the population of the world vs. the US, I wouldn’t be surprised if that population grows.
One solution I’ve tried is to send a bulk shipment of games to Amazon Fulfillment in the UK or Germany and have them distribute the games throughout Europe, where many of my international backers are. Maybe it’ll work, maybe it won’t–I haven’t heard responses to any of my query requests.
The other solution is an idea that I’ve been brewing for a while. It’s still taking shape, but I thought I’d share it in case it will help you. The idea sprouted from something interesting that I saw during the Viticulture campaign thanks to the “group buy” option I had (6 copies of Viticulture for $229, including international shipping–that’s $38/game versus $69 for a single game with international shipping). People on BGG started organizing group buys. A few came from the US–retailers and gaming groups–but a number of them came from Europe and Australia and Asia.
Although the shipping price to me is higher for a box of 6 games, the cost per unit is much lower than shipping a single game abroad. So I save a little bit per unit, and the international backers save a lot–that’s $21 savings per backer!
I’ll illustrate this point using USPS’s priority mail. Say I have a board game that weighs 5 pounds and measures 11x9x3.5. Mailing that game to the United Kingdom costs $53–that’s the best possible rate (and that doesn’t include any fulfillment labor costs). $53 for one game. If your one-game reward level is $50 + $20 international shipping, your margin for that game is $17. That’s considerably less than the cost of manufacturing the game and getting it to you (or the fulfillment company).
However, what if that backer buys two games? The cost to ship two games to the UK-based backer is $66. That’s right–to add an additional 5 pounds and size to the package only adds $13 to the overall shipping cost. That evens out to $33 per unit instead of $53. Let’s continue on that trend:
- 1 game – $53 total shipping – $53 per unit
- 2 games – $66 total shipping – $33 per unit
- 3 games – $79 total shipping – $26 per unit
- 4 games – $92 total shipping – $23 per unit
(Also, I haven’t said much about Canada. For a frame of reference, shipping 1 game to Canada would be $35, while shipping 2 games would be $45 total.)
Here’s my first thought when looking at these numbers: Does it help anyone–backers or creators–to sell individual games to international backers? Wouldn’t it benefit both parties to limit international backers to at least 2 games?
My reaction–and perhaps yours–to that idea is that it’s unfair to force international backers to buy multiple copies of a game, especially if they only want one. I agree. It’s not fair. And it could hurt funding–if an international backer doesn’t want to take the time to find someone local with whom to split a 2-game reward level, they might dismiss the project completely.
But what if it were a win-win for everyone, and if project creators facilitated international group buys? Here’s how I picture it working with some standard reward levels to create a frame of reference:
- $45: One copy of Game (North America only). Additional copies are $40 per game. (Add $20 for Canadian shipping.)
- $85: One copy of Game (international). Additional copies are $45 per game. (See $199 level for bulk discount.)
- $199: Four copies of Game (international). Additional copies are $45 per game.
The key here is that international shipping starts high but stays the same regardless of the number of games. Therefore you decrease your margins, and the international backers are heavily incentivized to purchase multiple copies of the game. This is communicated through the phrasing and pricing on each of the international levels. Whenever you get an international backer at the 1-game level, you can write them a thank-you note and link to a Google Form where they can indicate if they’re interested in going in on a group buy with other backers in their country. Simply by adding one backer to their pledge, they save $30 (as does the other backer).
Also, by including a clean, simple $199 level, you let international backers know that you’re looking out for them. By letting international backers add more games to the $199 level at the standard $45 price (including shipping), you’re treating them exactly the same as US backers. Everyone wins.
There might be some international backers who only want one game but don’t want to back it for $40 shipping, so for you put a link to a “potential international backer in search of a group buy” Google Form link on your Kickstarter project page. When you have about a week left on the campaign, you go through that data and try to group people so they can save on shipping.
What do you think? Have you seen projects that have handled international shipping particularly well in a way that is good for the backers and doesn’t bankrupt the creator?