Kickstarter Lesson #7: The Funding Goal – Stonemaier Games

Kickstarter Lesson #7: The Funding Goal

The subtitle of this post is: It’s not too late to turn back.

Let’s talk finances. :)

You’re about to embark on a Kickstarter project that will hopefully result in you meeting your funding goal, after which you will be expected to fulfill the promises you made to your backers. Thus, calculating your funding goal (and your reward levels, which we’ll talk about later this week) is absolutely crucial, not just for your Kickstarter success, but for your financial well-being.

Here are the questions you should ask yourself when calculating your funding goal:

  1. What is the minimum amount of money needed to make my project a reality? I’ll show you how to calculate this for board game projects in a minute.
  2. Based on my personal investment, how much lower than that minimum amount of money can the funding goal be? As you’re pondering this, consider the scenario in which you almost exactly meet your funding goal. Hopefully you’ll wildly exceed your goal, but just in case, can you deliver the product if you just barely meet your goal (knowing that you’re already investing some of your money in the project)?
  3. What is the cost to you if you receive funding for 500 units? 1000? 1500? Know how your project scales and make sure you can afford the minimum.

As you can see, it’s a delicate balance between keeping your threshold for success as low as possible and preventing yourself from going bankrupt. The harsh reality isn’t so much the cost of manufacturing your product–rather, it’s the cost of shipping your product.

Let’s talk hard numbers for a board game project. If you’re making a light and compact game, these numbers won’t apply. These numbers are closer to a game like Settlers of Catan–medium-sized rectangular box, an assortment of cards, pieces, and cardboard, a variety of art, and weighing in just under 4 pounds (4 pounds is a key threshold for sending first-class packages via USPS).

If you go with a manufacturer like Panda Game Manufacturing in China (who I cannot speak more highly about–they’re fantastic to work with), the minimum order you can place is for 1000 units. So even if you sell 600 games and raise a decent amount of money, you still have to pay for an additional 400 games. The good news is that you can sell those games later, but there’s no promise or guarantee of that. You’re not going to want more than 500 in overages.

Thus this calculation is based on backers pledging to receive 1000 copies of your game, with another 500 in overages. You might balk at the cost of the graphic designer, but as I talked about in the Art & Design entry, paying for a good graphic designer can save you a ton of time and money in the long run. Although it’s not fully explained here, I’ve included 20 pieces of original art at $50 each, plus $300 for the game board. (There should really be another $300 in there for the game box too.)

Also, you might think that you can save money by packing and shipping the games yourself instead of using a fulfillment center. However, even if your game fits in a medium-sized flat-rate USPS box, you’re going to pay $12.50 per game to ship them, not to mention the immense amount of time it’ll take you to pack and ship them. Amazon is more cost-effective and faster.

With that said, here’s the minimum amount you’ll have to pay to manufacture a game using Kickstarter as a funding platform (the 1000 games have a higher per-unit price because you’ll have some exclusive elements included for Kickstarter backers):

funding_goal

Note that Kickstarter now processes payments through Stripe, not Amazon. Here’s the fee breakdown (as of October 2016, credit to Jonathan Politis for clarifying):

For a pledge over $10 the fee is 8% + $0.20 (5% for KS and 3% for processing).

For a pledge under $10 the fee is 10% + $0.05 (%5 for KS and 5% for processing).

$39k. That’s how much you’ll need to raise to make a fairly standard board game (Viticulture, for example, ended up with a much higher per-unit manufacturing cost than this due to all the stretch goals).

Now, does this mean you should set your funding goal at $39k? Definitely not. A goal that high will ward away some backers. So this is where you need to start considering how much you’re personally willing to invest, and you can hope that you’ll be able to sell some of the mass-market versions of the game. In this case, if you personally invest $5,000 and you sell 300 of the mass-market games at $20/each (to a distributor, who will get a 60% discount), then your optimistic funding goal will be $28,431. Round down to $25,000 like we did with Viticulture? The risk is up to you.

The challenge with Kickstarter is something I alluded to in the previous paragraph–even though backers have nothing to lose by backing the project at any time, many backers will be hesitant to back a project that they don’t think will succeed. Conversely, when you reach your funding goal, backers are much more willing to fund it. There’s that element of certainty that backers value. So if you set what appears to be a reasonable funding goal, not only are pre-goal backers more likely to support the game, but you’re also more likely to reach and then exceed your goal.

I started this entry with the subtitle: It’s not too late to turn back. By that I mean that there’s nothing wrong with sending your game to a board game publisher to see if they’ll publish it so you don’t incur the financial risk of having a successful project. You won’t get the thrill of running a Kickstarter campaign and connecting with backers, but perhaps you could raise the capital through royalty payments to afford a Kickstarter project for your next game.

If you do stick with Kickstarter, just make sure you consider all of these factors before you set your funding goal and launch your project.

Up Next: Kickstarter Lesson #8: Reward Levels

Also see this retrospective entry about my Tuscany Kickstarter campaign for notes on this subject, as well as a Funding the Dream podcast episode with Richard Bliss in which we delve into the funding goal topic.

84 Comments on “Kickstarter Lesson #7: The Funding Goal

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  1. Why China is always cheaper?

    The costs of shipping and import taxes etc., you would think using someone like Millennium Print Group in USA would be cheaper.

    1. It’s possible that the printing of simple, specific components like cards is cheaper in other countries (though you never get rid of shipping costs–if you print and assemble in Indiana, for example, you still need to get the games to your distributors and fulfillment centers across the world). But the real key is that most of the tiny components found in games–plastic miniatures, wooden tokens, markers, custom dice, special mats and boards, etc–aren’t made at scale anywhere other than China. Even the games printed in Europe often source components from China and assemble in Europe (though the cost of labor factors into the choice of location for the assembly process). I’d recommend broadening your questions beyond some core assumptions I’m seeing, Mike: The question isn’t “Why [is] China always cheaper?”; it’s “Why do so many publishers choose to manufacture in China?”

          1. So what do you think is the best way to send a 1069 gram card set to USA from China?

            Other than get a tourist VISA and go to China and oversee shipping with SFC?

            Send to Fulfillrite to ship locally?

            Plus, you say I would not need to do a taxes survey only shipping survey, because as a foreigner sending product to USA and never done business ever at all, I would not reach the tax nexus for each state?

            I guess I would have to pay some import charge?

          2. Shipping logistics looks a big hassle and dead expensive if doing massive runs. Why can’t people just ship from China? I mean why do factories not have inbuilt shipping arms like SFC? Another thing is have you used Shopify fulfilment warehouses? Any cost figures there?

  2. […] 1 – We set the funding goal too high.Per My Last Email is a card game which translates essentially to this: making a minimum run of the game was relatively cheap. We were trying not to just raise the funds to make the game, but we were trying to recoup some sunken costs and in retrospect that was a mistake. A higher goal meant it negatively stretched out our funding percentage analytics, possibly giving potential on-the-fence backers pause, as there was a real threat we wouldn’t fund. It seems that backers are drawn to projects where they have some level of expectation that the project will fund and they will ultimately get the product. I’m sure we lost some backers because our campaign dragged out (we hit funding with 8 hours to go, phew!). Jamey Stegmaier from Stonemaier Games writes a great blog about this which you can read here:https://stonemaiergames.com/kickstarter-lesson-7-the-funding-goal/ […]

  3. I’m an advocate for keeping the funding goal as low as possible (while still being realistic enough to actually get the product made) in order to give yourself the best chance to succeed, and for that I always recommend removing “sunk” costs (prelaunch marketing and completed / prepaid artwork) from your funding goal – if you try to recoup sunk costs like these in your funding goal, you unnecessarily inflate it, and therefore risk not funding (and not recouping) any costs at all… I also recommend using a PM for shipping so that it can be separated from the KS Goal (and so that you have a better idea what shipping will actually cost closer to the time)… With all that in mind, here’s the VERY basic, VERY simplistic, calculation I recommend for the absolute minimum funding goal:

    ((Minimum Order Quantity * Landed Cost Per Unit) – Personal Investment {NOT art and marketing, this personal investment is cash you have that you are willing to put into manufacturing}) + KS & Stripe Fees, and then round up (always up) to, at least, the nearest thousand…

    So if you have an MOQ of 2,000 units (e.g. PandaGM current MOQ) and a Landed Cost Per Unit of $15 ($12 manufacturing and $3 freight – including import duties and taxes), with no personal investment, your absolute minimum funding goal is:

    ((2,000 * 15) – 0) + 3,000 = 30,000 + 3,000 = 33,000…

    This will ensure that the manufacturer is paid, the freight shipping is paid, and KS is paid… All that’s left to do then is collect the fulfillment shipping costs and pay the fulfillment companies (plus any warehousing, etc., that is all incurred only AFTER the game is made)…

    Again, this is meant to be a very simplistic method, and it’s always advisable to round up and/or add a buffer on top for unforeseen costs, taxes, charges, etc… The goal of crowdfunding is to get the game made and ready to be sent, and once you remove sunk costs from that, the only funds needed to get it made is to manufacture your MOQ, ship it to fulfillment center(s), and pay KS their cut…

  4. Hi,

    I’ve recently read though almost all of your posts on the chronological list and I’m still confused about something involving setting a Kickstarter goal.

    My conundrum is kind of similar to Jason Huffman’s above, but I want to ask this with details that match my situation more so.

    Selecting a small enough starting goal makes sense if you have an established fanbase that you can trust to blast your goals to shreds on the first couple of days. But since I’m a nearly unknown creator who has been struggling for a long time to get any exposure for my creative endeavors, I’d appreciate your input on these scenarios:

    I haven’t gotten my most recent price quotes yet, but for example, let’s say my game costs around 40-50-60 (including shipping and profits) and I choose a larger printing company that requires a minimum of 2000 games for the bulk order and they’ll ship it to backers for me. But I only have enough funds (from investors whom I trust) to put into the production value of the game/project.

    Let’s propose a bad scenario: I pick a lower goal, people like my project enough to back the tier that gets them the game, and the Kickstarter is funded, but I only get 1500 people who want the game instead of 2000+. As a small indie dev without the support of a larger company, I can’t pay for 500 extra orders (especially considering I have nowhere to store that many games either). Around 25000 dollars would be mind-numbing for me and it’s not a debt I can sustain. So at that point, I’d just issue mass refunds to people and apologize. (I’d really like to avoid that type of issue on my game’s run though at all costs since that would make people far less likely to want to back my game if I try again.)

    So in my mind, the safe choice for everyone would be a simpler equation of multiplying the price of the game x 2000 (and then add onto that for Kickstarter taxes) to calculate the goal. That way, it would essentially be: If I get at least 2000+ people who want the game and we reach the goal, we can start production quickly enough and the printer can ship them out. It would be a high goal, but if I get the 2000+ people who really want the game, then it’ll work. If not, then no one’s at a severe loss – the game won’t fund and I won’t go into debt. Because I really can’t afford to go into debt over any miscalculations.

    Do you think something like the safe choice could be viable for a small creator? Or would the high goal ward people away?

    (Keep in mind, the high-quality commercial-use art I’ve been getting so far looks amazing, so that will be a nice draw for people to see that I’m spending a meticulous amount of time working with the artists to make sure everything is just right. I’m hoping that will get people intrigued enough to at least check out the game’s mechanics even if it ends up not being the type of game they usually gravitate towards.)

    Thanks for any advice you can provide.

    1. Thanks for your question. I think that’s a perfectly fine formula to use. If your game costs $10 to manufacturer, $3 to freight ship, and you have $10,000 of sunk costs ($5 per unit for 2000 games), you could set your goal to $36,000.

      Also, if you work with fulfillment centers, you won’t need to personally store any of the games. It’s also very unusual for a manufacturer to handle fulfillment.

      1. But what if a fulfillment center in different countries totally ignores your email questions about KS fulfillment and their charges? I had 6 countries do that.

          1. Well, I contacted the ones you like in UK and Australia and I know you like Fulfillrite, as I will need a good USA company. But, how does it work with distributors in the US like GTS? Thanks

          2. You can contact GTS, but most likely distributors won’t be interested in your game until it’s a very visible, high-demand product.

    2. Just to say, practically speaking its essentially impossible to make certain that a given monetary value goal will certainly equate to a given number of backers. Backers are always permitted to back for no reward, so even if you set your goal as the price of your game multiplied by 2000, there is no certainty that you’ll get exactly 2000 backers. Bear in mind also that this implies using a pledge manager for shipping, since if you use Kickstarter’s shipping price that will be included in your funding total and make how much different backers pledge inherently varied, not to mention that this would have to be a single pledge level project.

      Also, you suggested a place where you would be able to have 2000+ backers. Your manufacturer might have a minimum order level of 2000 units, but they most likely then print in batches of 500 over that. A manufacturer that prints a minimum run of 2000 will be unlikely to then print a run of 2314 on request. If you get over 2000 backers you’ll probably need to print 2500 copies of the game, over 2500, 3000 copies, and so on.

  5. […] simple — setting a lofty funding goal makes it harder, and sometimes impossible, to get funded. You can’t base your goal on assumptions […]

  6. Hi Jamey, after reading your book, we started reading your blog: D You’re amazing: D I wish we had found your book before the start of the first campaign because now, when I read each subsequent lesson, I smile from ear to ear because you write the truth and only truth :) Based on your book and blog, we create our checklist to check before each stage in our roadmap whether we are not deviating in the wrong direction. Currently, we have over 600 thoughts and we are just starting to read the blog which we will read from cover to cover :) Thanks for this book of knowledge :) We made this mistake that we focused on the game, not on financial matters, and we did not fully count everything. What you write about in this blog and book is the same truth and I recommend that anyone who wants to start the campaign read this blog from the beginning to the very end. Thank you and we are already joining the group to contribute :))

  7. Hey Jamey, thank you so much for these incredibly informative articles.

    I’m a noob trying to use your model above to figure out my kickstarter funding goal, but the difference between Catan’s size/weight and my game (9″x5″x2.5″, less than 2lbs) is significant enough that I’m not sure how to account for it. Any guidance you can offer on how I can go about figuring this out would be greatly appreciated.

  8. Jamie, in a number of articles you have talked about getting your funding goal as low as possible to increase your odds of getting funded. With a professional product, video, KS page and independent reviews, is there a number that is too low and would make people less likely to back a project… $100, $500, $1000, $5000?

    You have said several times about how much money are you willing to put in if you don’t raise enough, what if you have already put that money/time in? For me as a design project, I had to buy a certain amount of material (large minimums that don’t scale with volume) upfront in order to make and test designs and then make samples. So I can offer a very good functional product with a functioning simple app, that I created, at a very low funding level. But like most projects, with stretch goals, I can produce my “ideal” product. My stretch goals levels would be similar to other campaigns but I am able to offer such a low initial goal because of those “leftover” sunk costs. Also over the past 4 years I was able to save money because I taught myself to code, and bought a sewing machine etc and was able to get some help/advice from friends.

    If you set your goal too low, even if it is true, does it make your product look fishy/less desirable/ or less likely to need a backers help? Is there any advantage to having a low goal so your numbers look better and with better numbers will KS/backers be more interested? Or is it better to calculate the hundreds of hours of time and effort it would cost if you had hired someone else to do it so your project fits in the expected norm (around 20K)? My friends are split and most think my goal should go no lower than 5K-10K or else it will looks off. A few say I could go as low as $1000. Thank you.

    1. I think the key is for the funding goal to be low but real (and realistic). Kickstarter has even recently reinforced that concept in their guidelines.

      As for your time, I think it’s worth compensating yourself on the back end, but up front I wouldn’t consider that a sunk financial cost.

  9. Hi, not really a question as such but:

    “the minimum order you can place is for 1000 units. So even if you sell 600 games and raise a decent amount of money, you still have to pay for an additional 900 games”

    I assume you meant 1500 as the minimum order? Its just that I’ve been getting quotes for runs of 1000 units, which might be because kickstarter is more prevalent now or do companies offer lower print runs for cheaper and so lower risk games (my game was much tinier than any of yours).

    1. Glenn: You’re right, though I’ve seen more manufacturers drop that amount to 1000, so I’ll adjust the numbers to fit that formula.

  10. Great lessons!

    Quick query based on the figures in the chart. Lets say for arguments sake you hadnt seperated the manufactured games into the 2 catergories and instead you got 1,500 kickstarter backers.

    Am I right in thinking if you had a basic $30 pledge then you would raise $45,000 with the 1,500 backers and could even offer free shipping (as thats factored into the amount needed)

    Appreciate this is very vague and obviously more variables to consider but in a nutshell would this be viable?

    Obviously I guess the caveat to this is by placing pledges at $39 then you raise the funds in 1,000 copies and this would also have free shipping? Then any money you sold the additional 500 for would be profit?

    I may be missing something!

    1. So, if you have a game that costs $10 to make and you have a $30 reward level with a $10 shipping subsidy built in, and you have 1500 backers. That would result in a profit of $15,000 (ignoring other costs and contingencies, which you shouldn’t do).

  11. […] based on covering manufacturing costs, shipping, sunk costs, and a small buffer. Not once in my “funding goal” lesson do I mention one of the most important and invaluable assets: YOUR […]

  12. So, I might have this wrong, but it seems like the personal investment is actually a gamble on whether you can sell more games after the kickstarter has finished.

    Since you recommend having 1000 backers and 500 copies sold after (to distributors or your website, etc), then for the $39K estimate above, you would set the pledge amount to $39.00, right? Then lets say you put a personal investment of $3,900, would you keep the pledge amount at $39.00 and lower the number of backers needed, or lower the pledge amount and keep the 1000 backer minimum?

    Thanks for everything you do!

  13. Hi Jamey, love your blog and games. It’s so great that you still reply to comments made on older posts.

    Have the figures above changed with regards to the way you do shipping/postage? I see that you have included $30 for international. Is your new approach to include $15 for all, and then charge extra for shipping? I looked at the Scythe kickstarter page. I’m almost certain that is what’s happening.

    And you only have to pay sales tax for kickstart pledges from customers in your State, is that correct? Do you pay sales tax on the full amount of the pledge? Can you deduct the $15 from from their pledge and then just sales-tax that?

    1. Anthony: Thanks for your question. These figures are just a rough example. Shipping should be calculated for each individual country, not a catch-all “international” amount. The Scythe chart is more accurate, as it shows a shipping subsidy built into the pledge, then any excess amount added on for each backer when they place their pledge. That’s my preference.

      US creators will pay sales tax for the full amount of in-state pledges. So if a backer pledges $50, you have to report $50. Of course, different states may have different rules about shipping.

  14. Hi Jamey, I am currently trying to realize my little boys dream (6years :o) of his own card game. It will be a card game with maybe additional board, first player & round token as minifigures as potential unlocks. My question is: what is a decent market price for a tarot-sized card game? I do have a feeling about total costs but I wonder on where to set the right price 19 or 29$ (yes I have read your “9” article :o)

    1. Marc: I think $19 on Kickstarter with a $25 MSRP sounds about right, though you’ll want to research games with similar quantities of components.

      1. Thank you Jamey for your time answering my question; much appreciated. I will have a deep dive read before I should launch our game on Kickstarter.

  15. Jamey,

    When setting your funding goal and using the Stonemaier method of shipping, do you include the additional shipping cost to non-US backers in your goal amount? For example, if it costs $15 to ship a game (freight and individual) to a US backer and I want to pass that saving onto the non-US backers, I’ll subsidize that $15 and make the backer responsible for any additional shipping cost ($5-$15, depending on location). But in regards to setting the funding goal, am I including the costs that backers add in shipping when they are not from the US? Or am I just budgeting my $15 subsidized shipping cost as part of my funding goal? Thanks!

    Brandon

    1. Brandon: Thanks for your question. I think it can really go either way–it just depends on how you structure your budget. The key is to estimate what those additional costs will be (it’s sheer guesswork based on where you think your backers will be located) and then factor them into your funding goal.

  16. […] Kickstarter Lesson #7: The Funding Goal […]

  17. […] Kickstarter Lesson:  The Funding Goal:  If you plan to Kickstart your game (like me), this article discusses developing a realistic funding goal for your board game. […]

  18. Jamey,
    You mention it is not too late to turn back, do you have a guide or suggestion on how to pitch a game to another company if it turns out running a Kickstarter is too much? Also, if you do that, do you run any legal risks of losing rights to your game or anything like that?

    Thanks,

    Aaron

    1. Aaron: Thanks for your question. I write mostly about crowdfunding, not board game publishing, but James Mathe has some great resources that should answer your question about pitching a game to a publisher: https://www.jamesmathe.com/

      There’s no legal risk involved in pitching your game to a publisher. It’s still your game until you sign the rights to them.

      1. Not Sell, license your rights…
        -old designer
        PS luv your posts, blogs and video…!!!
        Been out of board games for decades, discovering a whole new renaissance. Thx!

  19. HI Jamey,

    I know that somewhere in your lessons you provided an approximate backer breakdown by country ie this percent from US this percent from EU etc. I can’t seem to find it. Can you point me in the right direction?

    Thanks,

    Raymond

  20. Hi Jamey,

    I’ve been reading your blog and your book avidly. I understand that the industry standard for board game is to price the MSRP at 5x the cost to manufacture. How steadfast of a rule is this? How would it affect a Kickstarter in which you want to provide a discount to the backers?

    Additionally, if I wanted to include shipping in the reward level for US backers (and a discount for international backers), it might put the price above the MSRP. How would you handle or explain this point to the backers?

    Thanks so much for all you do for the community!

    David Zuckman
    Obscure Reference Games

    1. David: Thanks for checking out the blog and the book! That’s correct, many publishers use the 5x formula, but I’ve heard of some companies that also add in freight shipping costs and/or use a 6x or 7x formula. So I think it’s best to combine one of those methods with comparing it to games on the market with similar components.

      These days I tend to list the “value” in the reward level, not the MSRP (see Scythe). The value accounts for the MSRP + the subsidized shipping + anything else you’re including for free that you’re going to charge extra for later.

  21. Can I ask a postage question? How do you feel about charging people for postage after the KS has run?

    I’m struggling to budget accurately for “could get 100 orders from New Zealand or 100 orders from just down the road, or 50 from each”. The difference between those scenarios is so huge. I’m torn between assuming every backer is a Londoner, to get the smallest funding goal, and absorbing any extra postage costs myself – OR assuming every backer is a New Zealander, which will raise the funding goal considerably but at least I’ll be covered.

    The fairest solution to me seems, charge people for postage separately after the KS has run. I think that will have a psychological cost and discourage some backers, but that is perhaps better than getting myself into a funding disaster. That way, nearby backers don’t end up subsidising far away ones; and it makes my projections and budgeting far more clear and comprehensible. And it’d save backers money, as they wouldn’t be paying a % to KS on their postage (I’d have to budget in 10% of £50 rather than 10% of £80 for KS fees)

    tl;dr

    1) What do you think about charging backers separately for postage, outside of the KS?

    2) In your table above, you budget for 800 US shipping and 50 Canadian shipping – were those numbers a guess? If they weren’t, can I ask what sort of assumptions + logic you used to work out where your backers would probably be?

    Thank you for these blogposts. I’ve read them all, twice, and am referring them religiously as I move closer to launching my thing (which is plushies based on mental health conditions, but even though your board-game specific stuff isn’t relevant, the fundamentals still apply!)

    1. (edited to add: unfortunately, your magic shipping technique is – I think – one of the things which works for a board game, where you can ship direct from a manufacturer, but will not work for me sending out hand-made soft toys from my studio)

    2. Emily: Thanks for your questions. There are a few things here, and I’ll do my best to answer them.

      First, and overall, I think the best way for you to do this is to use Kickstarter’s new shipping fee system to select exact shipping fees based on each country. You should be able to calculate them in advance. Charge the highest you thinking those fees will be for each location–you can always reimburse backers later if you ended up overcharging them by a lot.

      Second, just because you’re making toys in your studio doesn’t mean that shipping individual orders from your studio is necessarily the most economical route to take. For example, calculate the cost of shipping 1 toy from your studio to Los Angeles, and then calculate the cost of sending a carton of 12 toys to a fulfillment center in the US and having that center send 1 toy to Los Angeles. Which is cheaper per unit? Sure, you might end up sending some individual orders from your studio, but you can probably offer a better shipping price to certain areas if you ship in the way I described. Better shipping price = more backers.

      My specific answers:

      1. You could do this, but backers don’t seem to like the idea. In a poll I ran earlier in the year (see last poll here: https://stonemaiergames.com/a-new-model-for-kickstarter-tabletop-game-projects/), 65% of people said they didn’t like being charged shipping after the project…and that was for a set price. They said in the comments that they really didn’t like backing a project without knowing what the exact shipping price would be.

      2. Yes, those numbers were a guess. At the time, I don’t know what I based on those numbers on, but now I have a lot more data. See my stats entries here: https://stonemaiergames.com/kickstarter/insights/insights-from-my-projects/ Of course, it’ll be different for you, as it’s a different product, and your core audience may be in the UK. I’m assuming you’ve been building a crowd and a reputation for a while–maybe look at who your current fanbase is and roughly base your demographics off of that.

      Good luck!

  22. This is the most helpful entry I’ve read yet, Jamey. Thanks a ton.
    I don’t really have any questions, I just wanted to give you a pat on the back. :)

  23. Hi Jamey,
    Thanks a lot for all your awesome lessons.
    I have two questions regarding the funding goal that I hope are useful.

    1. You said something like that if you need $39k you ask for $39k. My question is what about your profit margin? What do you earn?

    2. What about taxes? Why don’t you include them in your goal?

    Thanks again.

    1. Thanks for your questions!

      1. Off of that $39k, you don’t earn any profit. That’s just to make the game. However, some of those copies required for the minimum print run can be used to enter retail distribution. The example I used in the post had 500 of those copies entering distribution. You don’t know for sure that you’ll sell an of them, though.

      2. If your expenses equal your revenue, you don’t have to worry about taxes. They’re only a factor when you make a profit (see point #1). That’s an oversimplified answer, but that’s the basic reason why I don’t factor in taxes.

  24. Morning Jamey, I really like your chart and how you broke down your cost estimates here. A couple of questions though. In your chart under the Amazon transfer fees to different fulfillment centers you allocated 3000 units. At a quick glance it seems to indicate you are allowing for each game ordered to transfer twice, is this an accurate assessment or is this accounting for the 500 games you will have stored? I thought I read in a different post you mentioned that these transfers are fairly intermittent, are those the same fees you’re accounting for here?

    Thanks,
    Gary

    1. Gary: Thanks for your question. That’s exactly what I budgeted for–two transfers per game. The weird thing is that it’s really hard to see if Amazon ever does this (as far as I can tell, they have not done this with more than a few hundred copies of our games). But it’s better to budget for it just in case.

  25. […] the foundation of those scenarios is your funding goal, which you can read more about here. The basic formula is that your funding goal must be enough to cover a minimum print run for your […]

  26. Hi Jamey,

    I’ve been reading your posts with interest and it’s good to see the real figures rather than just theory and speculation.

    I understand the thinking behind determining how much I am prepared to invest and then dropping the goal below the estimated cost. However, your comment on 28th April had me a little puzzled. “Very few projects just barely fund.”

    I have read a few articles such as the following academic paper by Ethan R. Mollick that argue the contrary and state “Projects that succeed tend to do so by relatively small margins”

    https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2351441_code1503159.pdf?abstractid=2088298&mirid=1

    The Kickstarter project I am planning is for a technology project (https://www.worthingtonsharpe.com) rather than a board game. Is your advice on this point specific to board games?

    I am planning to treat most of the fixed costs as investments and so not trying to recover them from the Kickstarter campaign. Pricing the items below the variable cost seems risky to me as the more I sell, the more I will loose. However, I don’t think you are arguing this anyway. I’d be grateful if you could clarify.

    The economies of scale then mean I have a compromise between a reasonable unit cost and a reasonable goal. For example, making 100-units means I have to price at almost $940 each for a goal of $94,000. Increasing the quantity to 500-units means I can price at $575 each but the goal is then $287,500. Still not cheap but it’s a high-end precision product and it looks a lot better than the $940 price. However, that goal of nearly $300,000 seems dangerously ambitious.

    I’d really appreciate your thoughts.

    Cheers,

    Sam

    1. Sam: Thanks for your comment. I do pay the most attention to board games, but I try to keep an eye on all categories. That said, my statement about “very few projects just barely fund” is fairly circumstantial. It looks like that academic paper you read reviewed data from nearly 50,000 crowdfunding projects–I’d take their word for it, not mine.

      That is indeed a very high price point. My first questions are: Are people willing to pay $940 for this product? Are they willing to pay $575? If the answer is no to the first question and yes to the second, you can’t price it at $940. Maybe $599? Then, as for the funding goal, here’s the thing: Say you make the goal such that you need to get exactly 500 people to pledge, and you make 500 units. Is that good enough? Are you trying to selling exactly 500 units, or are you hoping this Kickstarter will enable you to jumpstart your business and enable you to make copies for post-Kickstarter sale too?

      If that’s the case, I suggest that you look not at the price per unit but rather the cost per unit. It it really costing you $575 per unit to manufacture the mouse? Let’s say the actual cost is $300/unit and you need to sell 500 of them. That would put your funding goal at $150,000. Many tech projects have high funding goals, so your target market will be not be deterred by that high number.

  27. Thanks Jamey- that sounds logical to me. I am also a bit reassured to see a couple of other recent card game projects that set goals of 30,000 and about 45,000 so maybe I’m not quite as high as I was thinking. I hear you on the secret ;)

  28. Hi Jamey thanks so much for your blog and these articles!
    I’m struggling with trying to figure out my fundraising goal. I am tentatively planning on using PGM to manufacture the game. I am planning on following your method of shipping games to Amazon fulfillment centers. After I factor in all the varying costs, I can’t imagine wanting to be in a scenario where I raised any less than 35,000. This has more to do with what it means to have raised less than that- namely that I won’t have sold enough copies of the game to begin with. I am looking at pricing the game around 50 dollars. Therefore, if I only sell say 500 copies or less (so raising 25,000 or less) then I am stuck having to fund tons of copies out of pocket (PGM has a minimum order of 1500 copies, so having to fund the purchase of 1,000 copies or more to go into inventory).
    Furthermore, if I’m only selling that many copies on Kickstarter, I’d be terrified that the other 1,000 copies would never sell. Does my take on this sound crazy to you? I just don’t normally see people doing board or card games setting fundraising goals that are that high. I would love to put 20,000 or less down as the goal but it seems like if I actually only raised that much it would be a pretty awful result. This is my first time doing this. If I set that high of a fundraising goal do you think that will backfire by people thinking I won’t be able to raise that much (resulting in them not pledging)? I would love to get your thoughts. Thanks for any and all help / ideas you can provide!!

    Sincerely,
    Jason Huffman
    Battle Hardened Games

    1. Hi Jason: That’s a great question, and you’re wise to budget your project in advance so you have a clear picture of what you need to do to fund your game. I think the key question is: How much of your personal funds are you willing to put at stake? If those funds add up to the equivalent of 500 games, then your funding goal should be based on the 1000 games you need to reach that minimum print run (plus shipping and other expenses). I think it’s better to have an accurate funding goal than a low one, but the lower you can get it based on your personal funds, the better.

      And here’s a little secret: Very few projects just barely fund. It happens, but it’s much more likely that you’ll either not fund at all or you’ll overfund. Don’t budget based on that–budget based on hard numbers–but let yourself be reassured by that a little bit. :)

  29. Alright Jamey, I’ve got a few questions directed at Tuscany for you now. Based on Tuscany’s backer price of 45.00 as the entry point to actually get a copy of the game, my math tells me at the minimum order of 1500 copies of the game. Your funding goal including your free shipping should have been around 67,500.00. Although you easily blew this number out of the water, your “funding goal” was set at 20,000.00.

    Did you anticipate significantly over funding your project, and wanted the goal to be lower just to get the 100% funded early to entice more backers to back and head for the stretch goals?

    Did you anticipate trying to fund to 450,000.00 ahead of time, and aim for it with your stretch goals, or did you add the goals as the funding kept creeping up?

    Did you have additional stretch goals ready if you had funded to say 1 million, and just left them out because 450k towards the end of the goal seemed like as far as you would go?

    What if you had only funded 100% of the goal and nothing more? Would you have been out the additional 47,500.00, or is that what you guys invested as a company into the game, so you only had to fund the 20,000.00’s?

    1. Jared: Thanks for these great questions. I’ll see if I can answer them. :)

      1. The reason the funding goal was lower is that we already had a sunk cost in play for the art and design. We knew we were going to pay those costs even if the project didn’t fund. We also had a little bit of cash on hand from retail Euphoria sales. Those funds added to the $20,000 created that threshold.

      2. I tie stretch goals as closely as possible to the extra cost vs. cost savings based on economies of scale. You might be able to make 1500 copies of a game for $16 each (manufacturing cost), but if you make 2000 games, that cost per unit might drop to $15.50. You can apply that $0.50 to add something new to the game.

      3. This kind of ties to question #1. We would have made a bare minimum of 1500 games if we barely funded.

  30. Thanks Jamey, I have a few questions with regards to the money you spent on the art and graphic design. In some of your other articles you’ve mentioned needing a few things already finished before funding your kickstarter: the card frames with artwork for at least 5 cards, the box, the gameboard, and your kickstarter page design. I’ve tried my best to decipher the pricing you’ve mentioned on other articles as well as this one which are as follows:

    1. Card Design – 50.00-300.00
    2. Box Design – 300.00
    3. Game Board Design – 300.00
    4. Project Page Design – ??
    5. Artwork – 50.00 per custom print

    This leads me to my questions. What else did you need your graphic designer for that added up to the 4000.00? Did you decide on a fixed price, was this hourly, or based on individual portions of the project being finished? Did you use a single artist, or multiple artists for the artwork on your cards? How often did your artist/s and designer collaborate on the project, or did they not interact much?

    1. Jared: The numbers in the table on this post represent the total cost to create a Kickstarted game, not just the pre-Kickstarter costs. The cost for graphic design on Euphoria was even higher than that, and I expect that number to go up for Tuscany as well. The more printed components in a game, the higher the cost. Graphic designers charge hourly fees based on an up-front estimate, and if they think they’ll go over that estimate, they should inform you in advance.

      For Viticulture, we used several artists. The artists don’t interact much, but the designer and artists should interact quite a bit (see the entry on card frames for more info about that).

  31. I do have a question in regards to your choice of Panda Game Manufacturing, not by any means do they seem like a bad choice. Did you consider a U.S. based game manufacturer, and the price to do so was overwhelmingly more expensive? Or was there more to their product, quality, and deliverables that pushed your choice to go with them instead?

    1. Hi Jared–that’s a good question. I’ve had a fantastic experience working with Panda, and I think a big part of it is attributed to it being a Canada/US-based company that manages a factory (and outsources to many hand-selected factories) in China. Their customer service is great, as is their quality and their pricing.

      We did research US companies, but we couldn’t find any that come close to doing what Panda can do in terms of variety of components. If you’re just looking for a card-based game, I believe that Cards Against Humanity uses a US company called AdMagic. That could save you some money on ocean freight, and they’re faster than Panda.

      James Mathe has a full list of manufacturers here that you might find helpful:

      https://www.jamesmathe.com/hitchhikers-guide-to-game-manufacturers/

  32. Jamey – Thank you so much for this post. It is really eye opening for a first time creator to have a dose of reality about what the total costs truly add up to be. I see so many mid-level board games listed for $15,000 to $25,000 on KS. Can you speculate if many people are under bidding what they really need or are most project creators investing that much? Also, you list some information on Euphoria in another post. The project goal was only $15,000 and another post said that you invested $11,000 into the campaign which totals only $26,000. Is there something that I am missing? Thank you again! Loren

    1. Loren: It’s tough to speak on behalf of those projects (you could ask them if you’d like!) I think part of it is how much you consider a “sunk cost”–if you’ve already invested $5,000 in art, then you should be prepared to lose that $5,000, and thus you shouldn’t build that into your funding goal. For Euphoria, we probably priced the funding goal too low. Tuscany’s funding goal will be $20,000 (it’s also the most expensive game we’ve produced to date).

  33. Hi Jamey,
    I have been following your Kickstarter lessons at the suggestion of Tom Vasel at Watchtower Games, and have found it very useful. I am new to kickstarter and have been preparing to move forward with a game I have had in the works for about a year now. I wanted to ask you a question regarding your kickstarter goal for Euphoria. How can you keep it so low ($15,000), and still meet minimum manufacturing quantity. I understand that you probably had a good idea that you would knock that goal clear out, but as a person who is starting out I am finding that my numbers show that Id need much higher minimum goal.
    Thanks for your time,
    Alec Zemper
    Portland, OR

    1. Alec: This is a great question. The answer for me is: How much am I personally willing to put into this project? The difference between the actual amount needed (see chart on this post) and the amount I and/or Stonemaier are able to spend creates the funding goal.

      For Tuscany, we’re actually raising the funding goal to $20,000–Euphoria’s funding goal may have been a little too low. If we had raised exactly $15,000, we would have still made the game, but it would have been really tight. We spend a lot on art and graphic design now, but I consider those sunk costs (for the most part) because we pay for them up front before the campaign.

      So for your funding goal, I would recommend using the $39k number listed on this post and subtracting from it the amount you’re willing to put into this project. If you have zero funds to put towards it, the goal needs to be pretty darn close to $39k.

  34. Jamey,

    Thanks for giving an estimate of expenses for a fairly basic game.

    Was Panda able to provide you with the 50 game units to reviewers so they had amble time to podcast/review and talk about your game or did you have to produce these units in house? I have found that it is very expensive to reproduce a prototype and am curious how you handled this.

    The Kickstarter/Amazon fees at 8% to 10%. I’m assuming you determined this using the base manufacturing expense. I assumed that their fees were determined by the total funds raised during the campaign. Can you shed more light on this?

    Thanks,

    Eric

    1. Eric–Hi, thanks for your questions. The review copies of the game are just retail copies of the game that I sent to reviewers for free. Thus from Panda’s perspective, they were just part of the retail order of games we placed with them (for Viticulture we ordered 1200 retail games). We only sent out a few review prototypes during the Kickstarter campaign, and they were made in house.

      The Kickstarter/Amazon fees are a set percentage. I can’t remember the exact formula offhand–it has to do with the size of each individual payment that differs between a few percentage points–but to be safe, just estimate it at 10% of total funds raised during the campaign. Thus if you raise $100,000 on Kickstarter, the money you’ll actually see in your bank account will be $90,000.

      1. It has now been three years since this post, but if i’m reading through it, others may be as well. The fees should be looked at as a per pledge basis.

        For a pledge over $10 the fee is 8% + $0.20 (5% for KS and 3% for processing).

        For a pledge under $10 the fee is 10% + $0.05 (%5 for KS and 5% for processing).

        So a $40 pledge with have a: ($20*0.08+0.20) = $3.40 fee which is only 8.5%.

        Also, as an aspiring game designer, your tips seem to be really helpful. Thanks for all you do Jamey!

  35. […] in Lesson 7 (The Funding Goal), I posted a cost breakdown of how much it actually costs to make a somewhat complex board game on […]

  36. […] goals are closely tied to your funding goal. Your funding goal should be the bare minimum you need to create a minimal viable product. Thus […]

  37. […] Up Next: Kickstarter Lesson #7: The Funding Goal […]

  38. […] in Lesson 8 (The Funding Goal), I posted a cost breakdown of how much it actually costs to make a somewhat complex board game on […]

  39. […] goals are closely tied to your funding goal. Your funding goal should be the bare minimum you need to create a minimal viable product. Thus […]

  40. Hi Jamey

    I think the number in “then your optimistic funding goal will be $38,431” should have been 28,431.

    – Morten

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