A Guide to Shipping Crowdfunded Projects

Yes! Your crowdfunding campaign has been a success and you’ve met your funding target. Now you’ll be able to make that innovative new product you’ve been working on a reality. But, wait. You’re now facing a logistical challenge. How are you going to get your shiny new product to those hundreds (or even thousands) of crowdfunding supporters!? Well, keep reading and 3PL will tell you how with our guide to shipping crowdfunded projects…

What is crowdfunding? 

Unless you’ve been living under a rock for the past five or more years, you’ll probably be aware of what crowdfunding is. 

However, we want to provide a definition as crowdfunding has become something of a generic term, covering several different ways of collectively raising money (some of which shouldn’t really be classed as crowdfunding). 

So, what is crowdfunding then?

In the simplest terms, crowdfunding involves receiving many small sums of money from large numbers of people to fund a new project or develop a product. In the majority of crowdfunding campaigns, funders will either receive a reward for donating (if they are funding a project), or they’ll receive the product (if they are funding a new product).

What crowdfunding platforms are there? 

If you’re looking to crowdfund for a new product, then there are quite a few different crowdfunding platforms to choose from. Some are industry specific (e.g. for creative/arts-based projects), whilst others are more generic and will accept pretty much any project or product campaign. 

Below we’ve detailed some of the most popular crowdfunding platforms currently in operation. 

Indiegogo

Indiegogo is one of the world’s most popular crowdfunding sites, having successfully funded more than 800,000 ideas since its founding in 2008. 

Indiegogo receives more than 15 million website visits each month and is available in over 230 countries. It also allows entrepreneurs to integrate their campaign with other platforms such as Google and Facebook, so they can more effectively market their project or product. 

Kickstarter

Kickstarter is a popular platform amongst entertainers and artists, but it’s also been used to launch successful products across the world. 

Since the platform’s launch in 2009, over 20 million people have backed a project on Kickstarter, with over 205,000 projects being successfully funded. 

Funding Circle

Funding Circle is a UK-based platform which specialises in peer-to-peer lending. The platform connects creditworthy businesses looking for finance with people or organisations that have money to lend. Whilst Funding Circle is a more ‘serious’ platform than the others listed above, it’s still been used successfully by entrepreneurs to launch new products. 

These are just a few of the many different crowdfunding platforms currently in operation. So, once you’ve chosen your desired platform, launched your project and had it successfully funded, you’ll be faced with the challenge of shipping out your product to those eager backers. 

Below, we’ll take you through the things you need to think about when shipping crowdfunded projects. 

How to effectively ship crowdfunded projects

Before you rush out and sign up with a shipping company, there are many different things you should consider in order to make the shipping of your crowdfunded project profitable, successful and headache free.

Set up a budget

What’s the point in crowdfunding a new product, if you end up losing money on it? You won’t be in business long if you take that approach, so it’s vital that you establish a budget for shipping.

You should ideally establish a budget for shipping before you launch your crowdfunding project. You’d be surprised how often people overlook this part of crowdfunding campaigns.

Yes, you’re launching the campaign so you can fund the manufacture of your new product, but if you don’t also raise enough cash to also cover shipping, you’ll be in financial trouble.

Setting a budget can make a really big difference to the overall profitability of your campaign. According to some calculations, establishing a budget and planning in advance can cut spending so that shipping only accounts for 15-20% of your funds raised. 

Decide where you’ll ship to

Another key part of successfully shipping crowdfunding projects, is deciding where you’ll ship your products to. 

You should begin by looking at the audience of your chosen crowdfunding platform. Some crowdfunding platforms are very US-centric, meaning that as much as 60% of your potential funders could be based in the USA. If you’re happy to ship to the US, that’s great. But if you’re not, then you’ll need to find a platform with an audience located in places you’re happy to ship to. 

If you are happy to ship internationally, then you’ll need to take into account the different rules that apply in different countries. Partnering with a 3PL can help remove much of the hard work that goes into figuring out international shipping factors (but more on that later). 

Work out the applicable taxes and duties

If you’ve decided to ship your product internationally (and many crowdfunders do, due to the international audiences of most crowdfunding platforms), then you’ll need to work out which taxes and duties you’ll have to pay for each region and country you’re shipping to. 

For example, if you’re shipping into the European Union then there are a variety of import taxes, customs duties, brokerage fees and other potential taxes that you’ll have to pay. If a very large percentage of your backers live in the EU, then it may be better to ship from within the EU itself. 

No matter where you’re shipping to, the most important thing is to plan ahead and make sure you’re familiar with all of the applicable rules and regulations. Get this wrong and you risk landing your backers with hefty customs bills and other charges – not the sort of ending you want for your crowdfunding campaign!

Packaging

Packaging is more important than many people realise. Before you buy a load of packaging, you should first establish the dimensions and weight of your product. 

This is as simple as measuring the length, width and height of the product. Once you’ve done this and you’ve bought appropriate packaging, you should fully package up a product and then weigh it (that’s because a box or packet can sometimes add crucial grams to the overall weight). 

Shipping carriers sometimes round up to the nearest kilogram, so it really can pay to keep your packaging as light as possible.

Estimate the number of packages

As well as figuring out the size and weight of your packages, you should try and calculate how many total packages you’ll be sending out. 

If you’ve set a concrete goal in your crowdfunding campaign, then this should be straightforward. For example, if it takes 100 pledges to meet the funding target for your new product, then you know you’ll be sending out 100 packages. 

By calculating the total number of packages you’ll be sending, you’ll be able to take advantage of batch fulfillment (i.e. sending everything at once). Many shipping carriers will provide you with a discount if you’re sending a large number of packages at once. 

Instead, if you decide to send your packages on an ad-hoc basis, you’ll end up spending a lot more overall on shipping. 

How quickly will you send your product to backers? 

How quickly will your backers expect their product? This is an important question to answer if you’re going to make your crowdfunding project a success. 

Naturally, many individuals are happy to wait whilst a crowdfunding project heads towards its target, but as soon as a project becomes fully-funded, they’ll want to know that their product is on the way. 

How quickly you send your products to your product’s backers largely depends on how much you’re willing to pay for shipping. The faster the delivery, the more you’ll pay.

If you’ve worked out your shipping budget, then you’ll know how much you can spend to ship each item. You should set expectations on the crowdfunding project page, and make it clear to funders how you’ll be sending the project e.g. first class, second class, expedited. 

This should reduce the number of queries you get from people asking where their product is…

Think about returns

People may have pledged money to buy your product and eagerly awaited it’s arrival. But that doesn’t mean they might not want to return it.

Unfortunately, like any eCommerce transaction, there will always be instances where someone wants to return an item they’ve paid for. 

If you’re crowdfunding a tangible, manufactured product, then it’s absolutely essential that you have a clearly articulated warranty and returns policy in place before you launch your campaign. If you’re not sure what sort of warranty or returns policy you should put in place, try researching similar products on crowdfunding sites and see what they offer. 

In addition to returns, you should also factor in lost shipments (particularly if you are shipping internationally). 

Tip – It’s a good idea to create 3% more inventory as an overage to cover lost shipments. 

Communicate with your backers

One of the most important things you can do to make the shipping of your crowdfunded products as smooth as possible is to communicate as much as possible with the backers/funders of your project. 

You should expect to receive questions from multiple different channels – directly via email and telephone, but also indirectly via Twitter, the comment section of your crowdfunding page and elsewhere. 

As with other forms of eCommerce customer service, the aim should be to contact the customer, before they have to contact you. If they end up having to contact you for updates, they’ll get frustrated or even angry!

However you do it, make sure that you communicate regularly with your backers, notifying them when their product has shipped, and alerting them to any potential delays or issues. 

Why you should use a 3PL to fulfill your crowdfunded project

If you’ve made it this far, then it’ll be clear that there’s an enormous amount of time, effort and (potentially) money that goes into the fulfillment of a crowdfunded project. That’s time that you could spend more profitably elsewhere, such as marketing your product or working on your next product. 

But, there is a solution. You can partner with a 3PL that’ll take care of every aspect of fulfilling and shipping your crowdfunded project on your behalf. 

The advantages of using 3PL for crowdfunding fulfillment

So, why should you choose 3PL to fulfill your crowdfunded project? We’ve set out some of the key advantages below. 

We are the experts!

3PL spends all day, every day fulfilling and shipping products on behalf of companies and individuals. We have dedicated experts and advanced facilities to ensure that everything runs smoothly, that products are picked and packed properly, that the shipping is cost-effective and reliable. 

If you’re going to entrust anyone with the delivery of your crowdfunded project, it should be 3PL.

We provide you and your customers with support

Arranging international shipping can be a complicated business, but when you choose to work with 3PL you’ll be assigned a dedicated account manager who will be on-hand to offer you support and answer any questions you may have about the fulfillment process. 

At 3PL we are also able to offer customer support services (via dedicated call centres and/or app notifications), answering your customers’ questions on your behalf and keeping backers updated on the progress of their product. 

You’ll benefit from rapid, cost-effective delivery

Because we send out large volumes of packages everyday, we are able to secure the best rates from the best shipping carriers. By working with 3PL you’ll get the sort of rates that’d be impossible to get on your own.

Should you work with 3PL? 

If you’re not sure if using 3PL to fulfill your crowdfunding project is the right thing for you, there’s a simple answer – ask us! Our friendly team is happy to discuss your requirements with you and provide you with more information about our dedicated crowdfunding fulfillment services. 

Take the hassle out of your crowdfunding fulfillment by speaking to 3PL today

Find more eCommerce advice on the 3PL blog…

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