Kickstarter Lesson #12: Shipping

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.

Domestic Shipping

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.

This helpful map from Minion Games' Hegemonic board game Kickstarter shows some options for backer shipping costs.
This helpful map from Minion Games’ Hegemonic board game Kickstarter shows some options for backer shipping costs.

International Shipping

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.

Fulfillment Companies

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?

Up Next: Kickstarter Lesson #13: Explaining Why You Need the Funds

61 Comments on “Kickstarter Lesson #12: Shipping

  1. Great advice on international shipments. I love the idea of trying to match up international backers. My company, Magpie Games (www.magpiegames.com), has started to do fulfillment for Kickstarters, and right now we’re looking at shipping in bulk to the UK and then having folks there ship our international packages out. The current status quo is just too expensive!

          1. I know! First, let’s see if the system actually saves us any money. I can see the potential for all the savings to be eaten up by transaction costs, unexpected expenses, etc. :)

  2. Thank you for sharing all your lessons learned… :)
    Very nice blog! I’ll keep my eyes on this one in the future.

    Have a great day and happy gaming!

    Best regards Emil, SunTzuGames

  3. Firstly, thanks for the depth of analysis Jamie.

    I’m in Australia. I’ve backed a few things through Kickstarter and indie go go. The international shipping price is certainly a factor I have to consider when backing. I have to do some analysis to work out how much i think the game will appear for at my FLGS (where I like buying games). The further the total backing costs goes over that price the less likely I’m likely to back it. Luckily games in Australian stores are already approx 40 – 70% more expensive than in the US already so it often a reasonable question. The other key factors are how much i want the game early and how much I want to participate in its KS success. Stretch goals and bling frankly dont motivate me much – its the core game I care about – or not. Also I doubt I would personally be bothered doing bulk orders to Australia and then redistributing to others who have ordered too – that just doesnt seem a viable model to solve the core problem. I may as well talk my FLGS to order in a sample batch at the cheaper unit costs and buy it from them to save me the hassle…

    I’ve thought about these costs a fair bit but have no experience in organising postage or fulfillment. So my ideas are likely to be pie in the sky. Seems to me there are a few ways to go;

    1. Non-north american fulfillment from Region of production. Many countries seem to offer cheaper international postage than the US. I presume an increasing majority of games are produced in China. Why not arrange non-north american fulfillment from there? I’d be surprised if Michael Lee at http://www.pandagm.com wasn’t at least interested in thinking this through.

    2. Distribute batches of games direct from the point of manufacture to regionally based fulfillment services. The bookdepository in the UK may have fulfillment services like amazon? (they certainly ship books and games too i think FREE to Australia from the UK somehow). Alternately you could look to combined games distributors / online game stores that are used to both handling shipments and sending games to individuals. I have such contacts in Australia who may be able to help.

    The biggest issues are whether there is enough volume across multiple KS games to make this a viable ongoing concern for all. And how to ensure the fulfillment occurs efficiently from each regional fulfillment point. and of course how much it would eventually save the backer upon whom all this relies in the first place.

    I’d love to see a breakdown of Viticulture’s 942 x 30% regional backers by country / region if that’s possible… and similar breakdowns from other KS games too if you know of any…

    Further to questions of volume I also wonder if anyone is tracking KS growth (specifically number of boardgame backers per successful game year by year) and how steep the upwards trajectory appears to be over the past few years…

    1. Kim,

      Thanks so much for your comment. These are some fantastic ideas and thoughts.

      First, it’s helpful to know that the bulk shipping idea (and all the coordination involved) isn’t appealing to everyone–that definitely makes sense. I did have one or two bulk orders from Australia with that intention (there’s a thread on BGG about it), but you’re right–not everyone wants to organize something like that.

      Second, to address your first point, I think Panda is open to sending out a few orders to Asia direct from their facility from time to time, but they’re currently not in the fulfillment business. I certainly wouldn’t mind if they were, though. :)

      Third, again, that would be awesome, but Panda only ships to one address.

      Fourth, as for a breakdown by continent for Viticulture, I can throw something together: 22 backers in Asia who are receiving at least one copy of the game (2.4%), 23 backers in Oceania (2.5%), 682 in the US (75.7%), 51 in Canada (5.6%), 114 in Europe (12.6%), and 8 in Brazil (1%).

      1. No probs Jamey. Yep I offered up pandagm as a potential example, knowing they have a reputation for QA and are i presume making a significant proportion of KS games. Of course fulfillment may not be an area of business they are interested in expanding into, but an independent company with the same eye for quality might be a good fit. Thanks for the stats. From the numbers you present there doesnt look to be all that much demand outside of north america and europe. Although i guess if the mailing prices dropped you would be looking at a corresponding increase in backers from regions outside north america.

        1. Kim–You’ve inspired me to talk to Panda more about distribution. You’re right–even if they don’t want to do it, maybe there’s a company down the street from them that will.

          I agree with your assessment about Europe and North America. I’d love to drop shipping prices to Europe (and Canada, for that matter)–and you’re right, maybe dropping prices for those key areas would increase backers in those areas too.

          1. Hey Jamey did you get anywhere discussing KS fulfillment from China with PandaGM? I think impressions does KS fulfillment + regular distribution from the US – do you know if PSI do too?

      2. I guess at these low % of international orders its not all that hard to subsidise the international postage costs in the costings of the core of 75% of north american backers. Assuming you subsidise say 50% those 25% of international postage costs, that will be spread pretty thinly across the remaining 75%. I guess from the game developers POV you need to work out which approach will hurt backer numbers more…

        1. True…but ideally, I want each backer to pay for what they’re getting, not cover the cost of another backer. I want the best possible price for each individual while still covering my costs.

  4. Thank you for all of the information about international shipping. I am in the process of launching a Kickstarter for an essay collection authored by more than 20 writers spread out over 5 continents. But, I’ll only be able to provide the writers with about 10 copies of the book (using a USPS M Bag) since Amazon’s Createspace only ships US and I am afraid I will get in over my head if I open up shipping to international backers. I have a few ideas of items I can offer international backers, aside from an eBook, and I hope that will get some support.

    Thanks again for this post!

    1. Hi, thanks for your comment. One thing to consider is that media mail (books and CDs) is much cheaper in the US or internationally than non-media mail. Perhaps you could gauge how many books you’re willing to pack and ship by hand (slipping a book into a padded envelope is much less time-sensitive than assembling a box), and that number could be the limit for an international backer hard-copy level. For example, if you’re willing to spend the time hand-packing 50 books and creating their respective mailing labels, make the limit for that reward level equal to 50 backers, one book each.

      1. Re: Limits – That is exactly what I decided. I am leaving US-only to generic paperbacks and limited int’l paperback backers to 50 of the following categories: one signed by me (editor and project lead) for $25 and copies signed by the other two principal actors in the project for $50, with $10 additional for shipping. I figured this is a safe hedge against the international backers whose shipping costs will cut farther into the pledge revenue than others. But, since my project is international, I’m not leaving out the 6.6 billion people outside of the U.S. Plus the eBook will be open to them.

        I don’t think there is an international media mail. I ship individual books domestically very regularly using media mail and have the costs (including envelopes) down to the cent. I’ll check on the int’l media mail though.

        1. I think you may be right about media mail–I looked on USPS.com, and there’s no mention of international media mail. Sorry about that! Sounds like you have a good plan in place, and the ebook will also help.

          1. Yeah, I saw the same thing. Thanks again for the great post, the details and logic behind your thinking/decisions were very helpful.

  5. Kim: Thanks for the follow up. Panda is not equipped to fulfill shipping orders, so they’re sticking with being a manufacturer. If there is a company in China that only handles fulfillment, Panda (and I) would love to know.

    Impressions is a distribution broker, unlike PSI, which I believe is a distributor. The difference in this case is that Impressions has a shipping facility that specializes in sending out small shipments to distributors around the world, so they can also handle a small number (a few hundred) individual shipments.

    1. Thanks Jamey – thanks for trying. I thought i should actually give your group buy thing a try and found a BGG KS order group in sydney to start collaborating with. I’ll see how it goes. Wonder how many of these groups run via BGG. I imagine each large city could do with one…

      1. I think joining a group on BGG like that is a great idea. Make sure one of you subscribes to the Stonemaier e-newsletter, because there will be a limited number of spots available for Asia/Australia group buys.

  6. This is exactly what dumbfounded me. Here I was panicking about the ‘rolling up sleeves’ and storing 1000 boxes in my garage.

    Just for this article alone (and your replies to EVERYONE) I backed Euphoria. Might consider raising the backing too… Amazing Jamey

  7. Thanks Jay! I’m glad you found it to be helpful. Please stay tuned for another Kickstarter Lesson on shipping within a week or so–it’ll explain what I did with Viticulture and Euphoria.

  8. Hi James, we just backed Euphoria as a LGS here in South America. I just read this and came up with an idea. Maybe we can serve as your intermediary. Qe coul charge $10/$15 more than the US price of the game and you sending all the game to us. Right now we have to take a bet on a new game, but if you allow to publicly do this pre-sale, I think is a win/win scenario, as we could still resale the games of costumer who fail to claim their own. Thanks for the considerations you make on us and for all this knowledge you are sharing!!

  9. There is a real affordable third party logistics and fulfillment center in Southern California called PHV Logistics. They specialize in start-up companies with one or 2 items being shipped to hundreds or thousands of customer at a time. They are minutes away from the Port of Los Angeles so you can have your shipment of pallets delivered to their warehouse. Which is a lot cheaper than shipped cross country.
    Check out their website phvlogistics.com, I have used them for my fulfillment services for years.

    1. Zach–Thanks for your recommendation. Have you ever sent something comparable to a board game via that service? If so, do you have a rough estimate on how much they charge to send a package to, say, Australia, Spain, or Turkey?

      1. They do customized pricing, which is great because you will only pay for services you require. Also, they work with UPS and FedEx to get you the best shipping prices possible. As a regular UPS or FedEx customer you will NEVER get the discounted pricing that PHV Logistics can get for you. In most cases, they will be able to get a Flat Shipping rate with in the United States. International shipping might be a little more difficult but you can always average out the international shipping fees. I have used them for several Fulfillment projects and would recommend them to any company from start-ups and beyond. Check their website: www. phvlogistics.com

    1. Much better prices, yes, and the scope of the fulfillment services goes beyond any other service I’m aware of. Also, using Amazon multi-channel fulfillment makes it really easy to also sell your product on Amazon.com through something called Amazon FBA.

  10. Jamey,
    What percentage of your orders for Viticulture or Euphoria were international orders as opposed to US orders? Did you use those numbers to help “estimate” the kind of shipping costs to expect with Tuscany and help further tweak your game cost to cover that?

    Were there certain places internationally that so few orders came from that you would rather have just excluded shipping from?

  11. Jamey, first have their been any significant updates or new information that you have come across in the past few months about bulk shipping or group buys? Next, since you work so heavily with Amazon, will Amazon ship at a case level or does each game go individually? Can you simply look at Amazon’s rates for say the weight of 6 games and get an accurate idea of shipping cost?

    1. Loren: Sure, you can easily plug that into Amazon’s calculator to see the price. I’ll let you figure it out for your specific game, but here’s an example: If I want to send 6 copies of Euphoria (a 2kg game) from an Amazon fulfillment center in the US to a US address, all 6 games fit into one big box, and the total shipping cost for that box is $24.

    1. Right, you can’t ship via Amazon to Switzerland or Norway because they’re not in the EU, nor Croatia (even though they’re in the EU). I have to ship to those countries from the US.

  12. Jamey,

    These posts and comments sections are very helpful and I’m incredibly grateful that you have put so much time and effort into creating all this content. I’m just about ready to launch a Kickstarter for a game that is pretty much the same dimensions and weight as Viticulture – also being manufactured by Panda. But, after reading through everything here, I’m still getting stuck at accurately calculating international shipping costs.

    You have to calculate freight charges from China to the different distribution centers in the US, Canada, and EU. From what I can tell, a solid estimate for this is about $1000/location from Panda to the FBA locations. And it sounds like you used Dimerco for this?

    Then, if you are based out of the US, it sounds like you have to pay 20% to customs in the EU for what an individual backed your project for e.g. backer pays $40, customs charges $8.

    Finally, there is the shipping fee from the FBA center to the backer. For Europe, this is, on average, $25 depending on how many backers you have in the different parts of the EU.

    The FBA charges are not included in this list but I’m in contact with someone from Amazon and trying to work though understanding all the currently.

    So is it accurate to calculate that shipping to the EU is, on average $30-$35/unit and Canada is, on average, $20/unit for shipping?

    I completely agree with you that it’s important to service the EU and Canadian backers. I’m just struggling to get a reasonable estimate of international shipping charges so that I don’t end up in the negative from this whole venture. Do I have the gist of it here or am I completely off base?

    1. Rusty: Thanks for your questions. Indeed, I use Dimerco for all of our freight shipping needs. I’ll link to a few more detailed shipping posts at the bottom of this post where I talk about these other topics, but to reply in brief, if you’re shipping products in bulk to, say, Amazon.co.uk, when those products enter the country, you pay VAT on the manufacturing cost of each of those products, not the Kickstarter reward “price.”

      The shipping fee from Amazon.co.uk to an individual backer depends heavily on the weight of the product and the destination (UK, Western Europe, or Central Europe). For a 2 kg product, it’s about $8 to the UK, $16 to Western Europe, and $34 for Central Europe. It’s important that you don’t average those prices to create one blanket price for all of Europe, because those costs are very different, and the majority of EU backers will be in the UK and Western Europe. There’s a full list of these costs as well as those costs plus freight/fees on the first link shown below.

      https://stonemaiergames.com/how-to-provide-free-shipping-worldwide-on-kickstarter-a-comprehensive-guide/

      https://stonemaiergames.com/lessons-learned-insights-mistakes-and-solutions-for-offering-worldwide-shipping-on-kickstarter/

  13. We’re ready to launch our Kickstarter campaign (hey Jamey!) with one rather large question mark – dimensional weight. Met w/ USPS, talked with a few others, and our product dimensions fall smack in the middle of dimensional weight hell. We can’t change the dimensions of our product, and finding costs in some zones double the cost of the reward. Thoughts?

  14. Ben: Thanks for your question, and I’m sorry to hear about the trouble you’re having with dimensional weight. Talking with USPS is a good first step, but have you talked to fulfillment centers? They often have special prices arranged with couriers for which dimensional weight doesn’t matter as much. I’d recommend reaching out to a few of them on the following spreadsheet:

    https://docs.google.com/spreadsheets/d/1bx2h-oZ-ZcNdKw-yyAUfl-BbWOjmqP6tYu9jTKPxfnI/edit#gid=1844848505

    1. Peter: Definitely, I think it’s universally known that people prefer the impression of “free” shipping, even if they know it’s just a subsidy. I’m no different. I think the key, though, is to be transparent and precise–don’t take a loss on shipping just to make it “free.” Check out the shipping chart on my Scythe project to see how I do it.

  15. Hey Jamey! Great article. I used a company called ShipMonk (www.shipmonk.com) for my kickstarter campaign that ended last July and we shipped in this past February. They basically took the product from my manufacturer in Shenzen, and got it to all my backers worldwide. My product was less than 1lbs, so the shipping through them made sense, rather than trying to ship “locally” to each country. Domestically not much savings, but internationally we saved a ton of money compared to usps. (We used dhl global mail).
    Just wanted to share the experience, let me know if you have any questions!
    Craig

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