Shipping and Fulfillment

Every time I ship out Kickstarter rewards, I learn more about the process and I share it with readers in these long entries (and on the fulfillment Google Doc).

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30 Comments on “Shipping and Fulfillment

  1. Hi Jamey, Before we begin our KS Campaign I am still a bit confused about the cost of VAT in the EU. I see you mentioned your cost for shipping Viticulture from the Manufacturer to Amazon Fulfillment Centers in the UK and Germany at about $5.00 per game. If I add the cost from Amazon to the backers it looks like a total of about $11-13. My question is where does the cost of the VAT come in and how would I figure what it would cost us to ship our games from the EU?: Is it based on the manufacturers cost per game or is the price based on the overall shipment coming into the Amazon fulfillment center? Thanks for any advice you can share.
    Stan

    1. Stan: Thanks for your question. A few things to keep in mind here: First, keep in mind that the cost to ship from Amazon.co.uk to backers in Western Europe is much different than shipping to backers in Central Europe. The range is much wider than $11-$13.

      Second, for Kickstarter rewards, VAT is based on the manufacturing cost of the game, not the reward cost. So if you have a $40 game on Kickstarter that costs $10 to make, the VAT will be about $2.

      1. Thanks so much Jamey. I appreciate you taking the time to write back and clarifying VAT. It makes sense. I am glad to know it’s based on manufacturing costs. And by the way, thanks for all of the advice and posts. It is helping a lot of us new game designers.

  2. Hello Jamey,

    First of all thanks for reading this and for all the info you share on your blog, I assume you have lots of requests and tasks to do so again thanks. I’ve looked for a place to post this comment and really didn’t find the exact place, hope this is well.

    My name is Javier and I’m one of the members of “Ether Wars; The Board Game” a soon on KS project from Spain. You can find many info of our project in our social networks and at our web (http://en.etherwars.es) if you are interested, but I don´t want to extend too much.

    So I’m going directly to my question. We are talking to Wingo and Panda Games for our production. I know about them and quality issues and so, that’s not the problem, what is on our mind is how to control the effective manufacture of the game once started from here. Would they respond to our demands? It’s any mechanism to control it better?

    I know you have worked with them and passed through that way before so hope you understand our insecurity.

    Any help or info you can provide use would be awesome :)

    1. Javier: Thanks for your question! It sounds like you’re worried about working with a manufacturer. I think the most effective way to do it is to find a manufacturer that communicates well, and in turn, you communicate well with them. They’re people just like you and me, so there’s no need to demand anything from them. Just be reasonable and clear, and they’ll do the same. Also, get samples from them as needed and get quotes early and often as the game evolves.

      1. Thanks for you answer Jamey. Luckily we already have such situation but we wanted to be sure that It Works fine, and you are an expert so we are more relaxed now :)

  3. We have a very complicated fulfillment structure with a wide variety of different rewards being shipped (yes, we’ll avoid that next time around).

    Maybe you’ve written about this somewhere—in fact I might have even asked at some point, but are you aware of any foreign companies to which you can send mixed pre-labeled boxes which they then re-ship?

    For instance, we have maybe 36 backers in Australia—but they have different types of packages, some that include personalized items. I keep wondering if there is someone that I could send all those mixed packages to that would then mail from Australia, thus saving on shipping? (We’re got a few countries that are receiving more than 30 items so this might be worthwhile.) I could ask backers to do this, and have considered this. I’m just wondering if it’s an existing service.

  4. Wendy: I bet several of the companies on the Australia/NZ spreadsheet would do that (depending on the item–some of them only ship games). They’re not really limited in what they can ship, so if you sent them a few cartons or a pallet of something that they could then ship within the country, I don’t see why they’d say no to that.

  5. Hi Jamey,

    Thank you for providing this wealth of information and sharing your learnings, really appreciated. I am playing with the idea of starting a Kickstarter Campaign your blog really helps with the decision making.

    I have one comment and one question, both regarding sales tax / VAT.

    Question:
    I have read conflicting information about the need to collect sales tax when using Amazon FBA. Some argue that this creates a nexus in all states where Amazon has a warehouse and the seller has to collect sales tax – others argue that it doesn’t.

    Is there any definite answer to this? Dealing with a dozen taxing authorities as a non-resident doesn’t sound really appealing.

    Comment:
    You mention in your answer to Stan that the VAT is based on the manufacturing cost. I am not an accountant or tax consultant but you might want to double check this with one, especially for higher value products.

    You basically have two roles in in the process. Importer (inside of the EU) and retailer (inside of the EU).

    Let’s split these roles for clarity and look what would happen if I would import your product and sell it in Germany from a VAT perspective.

    I am ordering 100 games for $10 each. When the merchandise arrives at customs they look at the value of the product, which at this time is $1000 (plus the cost of shipping it to the EU border – lets say $53). So I have to pay 19% VAT on $1.053 = $200.

    Let’s assume I want to make $30 profit on every game. I will have to charge $40 + 19% ($7,60) VAT. In Germany prices for consumer always have to include the VAT, so the price tag reads $47,60

    Because it is such a great game, I am selling all of them within a month. At the end of the month I have collected $760 in VAT but I can subtract the $200 I paid when importing the product. So I have to send the tax office $560. Overall I have paid 760 in VAT (200 when importing and 560 when all to products are sold)

    When you are importing and selling and selling a product you might have to collect VAT on the Reward value and not on the manufacturing cost. There are some special small business rules, which might help to avoid this but have you checked your approach with a European tax consultant?

    Thank you,

    Carsten

  6. Carsten: Thanks for your questions. As for Amazon FBA and sales tax, the only hard and fast rule I’m aware of is that you must pay sales tax on purchases made by buyers in the same state as your company. So if your company is registered in Michigan and someone in Michigan buys something from you via Amazon FBA, you have to pay sales tax on it to Michigan’s Department of Revenue.

    So, the situation you described for VAT is different than the situation I’ve described for European fulfillment of Kickstarter rewards (which, yes, I’ve checked with multiple European accountants about). In the case of Kickstarter rewards, it’s not quite a sale, and it’s made BEFORE you import the products. You only need to report the manufacturing cost of those items. In the example you gave, you’re selling the products AFTER the import happens, so you need to report the full MSRP on those products as they enter the EU.

  7. I live in Norway and am going on holiday to L.A. this summer. I plan to print a few prototypes in china and maybe ship them to L.A. and pick them up there, rather then ship them to Norway and pay customs. How does the customs system work over in America? Do you pay any import tax or VAT? And what is the price limit before you have to pay customs? In Norway it was recently adjusted up to ca. 40$

  8. Petter: I pay very little important tax when I import my games from China to the US. I don’t know the exact percentage, but I would go as far as to say it’s a negligible amount.

  9. Thanks. I am doing a kickstarter over the summer and plan to use boardgamesmaker.com as manufacturer and fulfillment. Do you have any experience using them?

  10. Okay thanks anyway for a superb site. This is my bible!
    If I can make a request, I think it would be interesting to read more about kickstarting from outside of US and EU countries.

  11. You are THE shipping master! So awesome you have come up with and shared all this so others can follow your great example and save everyone shipping costs thank you!

  12. Thanks for this google doc!
    But I was thinking price will be less expensive ^^.
    Is there any fulfillment company adapted to small smaaall objects?
    I’m launching a KS and I will have to ship dice and the price I saw in the document scared me :p
    (i’m from Europe and I make my dice in USA)
    I will search of my own of course, but if you have an idea…
    ^^

    1. Elisabeth,

      These are all the companies I’m aware of. I’d recommend picking a few of them and telling them the size and weight of your product to see the exact price they can give you.

      Jamey

  13. Hi Jamey! Here’s a quick one for ya: I now have precise shipping rates based on package weights from fulfillment companies in the U.K., Canada, and the U.S.. (and Australia soon). Now what? Assuming i am NOT building in/subsidizing any of the shipping expense into my kickstarter pledge amounts, Do I simply tack on my per-game Freight and Vat costs to my shipping cost, and wallah, there’s my backer shipping costs? Cuz, those are weird, uneven numbers…. Do I pad it a bit to be safe. Do I round it up to nice even whole numbers? (To recoup pick n pack fees, and/or other freight-related fees).

    By the way, I listed you among “the greats” (Klaus Teuber, Reiner Knizia, Uwe Rosenberg, Martin Wallace, Bruno Faidutti, etc..) in a recent article…..and the editor decided to feature include you and Rosenberg. : ) (You’re so famous).

    http://columbiabusinesstimes.com/2016/08/30/mu-professor-within-reach-board-game-dream/

    1. Mark: I’m honored that you listed me among the greats! I certainly don’t think I belong on that list, but I respect your opinion. :)

      As for your question, I would definitely recommend rounding up on the shipping rates. You’re almost always going to spend more than you think on shipping, especially since rates and weights change over time. Nice whole even numbers don’t matter.

  14. Jamey,

    I noticed you did 5 things for Scythe:

    1. In the sidebar rewards you simply stated “Ships to Anywhere in the world” (not using the KS feature to detail shipping here)
    2. You gave people the opportunity to “Add up to 2 more copies at $59 each”
    3. Under “Shipping” in your the main body of your page you revealed shipping to different regions and reminded folks that this amount is “Automatically Added at Checkout”
    4. You allowed folks to mix up to 3 rewards by promised to charge them once per pledge and NOT once per game. (Meaning the price of shipping did NOT go up).
    5. You prompted retailers who wanted “pricing information” to contact you directly.

    QUESTIONS:
    1. Was offering 3 games for 1 shipping rate cost effective? Perhaps your reasoning is that the margin realized with additional games ordered (at $59 a piece) covered any incremental cost of shipping a heavier box filled with three games? Or is this something to do with scarcity and and/or keeping production manageable?
    2. Does backer Kit automatically add the shipping at checkout? Cuz for add ons they have to manually add $.
    3. Why a limit of 3 games? Is it because more than this is more of a retail purchase?
    4. You prompt retailers to contact you for special retail pricing. I read your blog here: https://stonemaiergames.com/the-secrets-to-making-your-tabletop-game-kickstarter-project-appealing-to-retailers/ and noticed that you recommend taking bulk orders (10 or more) offline and offering a 50% discount off of KS MSRP. Do you still advocate this approach?

    Thank you!

    1. Thanks for these great questions, Mark! I’ll answer them below:

      1. Was offering 3 games for 1 shipping rate cost effective? Perhaps your reasoning is that the margin realized with additional games ordered (at $59 a piece) covered any incremental cost of shipping a heavier box filled with three games? Or is this something to do with scarcity and and/or keeping production manageable?

      –The reward price includes a shipping subsidy that covers the incremental cost up to a certain extent. So it is effective to do that for 3 copies of Scythe, but beyond that, the shipping price jumps up, and I didn’t want to mess around with different fees for the same area or shipping multiple cartons to the same backer.

      2. Does backer Kit automatically add the shipping at checkout? Cuz for add ons they have to manually add $.

      –I’ve never used Backer Kit, so I’m not sure.

      3. Why a limit of 3 games? Is it because more than this is more of a retail purchase?

      –In addition to the reasons stated in #1, it is a way for me to delineate an individual backer from a retail backer.

      4. You prompt retailers to contact you for special retail pricing. I read your blog here: https://stonemaiergames.com/the-secrets-to-making-your-tabletop-game-kickstarter-project-appealing-to-retailers/ and noticed that you recommend taking bulk orders (10 or more) offline and offering a 50% discount off of KS MSRP. Do you still advocate this approach?

      –On Scythe, the retail pledges started at 4 copies (for fewer than 4, they would just have to back as a regular individual). Their discount was roughly 50% of KS MSRP, though I charged them shipping on top of that, and their shipping rates were tiered based on quantity (for reasons I mentioned in #1).

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