Crowdfunding hasn’t been easy. Now that your project has garnered mainstream attention and raised funds to take it to the next level, you deserve a pat on the back. Nonetheless, a path filled with impediments and uncertainties lies ahead. How you approach and manage your post-crowdfunding journey is crucial in determining whether your project will be the next prodigious crowdfunding story or another failed entity.
After your crowdfunding campaign, fulfilling and shipping your rewards or delivering on the promised incentives is essential. First and foremost, it’s always best to plan for shipping and reward fulfillment before kickstarting your crowdfunding journey. Consequently, you will gather valuable insights to help with the pricing of your crowdfunding campaign.
Getting your product in the hands of your passionate backers is foundational to the ultimate fruition of your crowdfunding journey. But again, akin to all other aspects of your campaign, successful shipping comes down to planning and preparation from the very beginning. To help you understand the fundamentals of shipping and fulfilling, we’ve picked the brains of global leading couriers and prepared this detailed guide.
Crowdfunding fulfillment: a guide to shipping strategy and costs
1. Setting up a budget
Fulfillment and shipping expenses are a significant cost center of your entire crowdfunding project. Therefore, failure to set up a budget for shipping and, importantly, not being strategic with your reward program can be detrimental. For instance, it’s not unheard of for campaigners to lose all their crowdfunding proceeds to cover shipping expenses or become bankrupt.
Therefore, it’s essential to set up a realistic budget and stick to it. Creating a shipping plan weeks before launching your project on a crowdfunding platform can differentiate between turning a profit or derailing your campaign.
Of course, you must gather relevant information (as discussed within this post), including considering your product’s weight and dimension and your preferred packaging and shipping costs to help you draft a sustainable budget.
2. Choose the right packaging
The type and weight of packaging you use are consequential to how much you will incur delivering products. In most cases, the pricing structure for couriers depends on the dimensional weight of your package. As you can imagine, the larger the container, the more costly it is for shipment.
As a result, the ideal practice is to use light materials and efficient styles to reduce the volumetric size of your packages. But still, you must safeguard your items against possible damage. All in all, optimizing your packaging sizes can significantly decrease your shipping expenses. Also, packaging offers a perfect channel to advertise your brand. Customized packaging enhances brand recognition, which might bring unexpected opportunities to your campaign.
3. Distribution strategy
Once you solidify your campaign’s funding and optimize product packaging, it’s best to focus on shipping and fulfillment. There are two approaches to getting your products delivered to backers: the DIY approach or contacting a third-party logistics provider (3PL) to manage and ship all your orders.
A DIY approach or in-house packaging is ideal if you intend to ship small volume products to a few backers. Still, you must incur upfront fees such as packing and labeling products. Also, you might require additional labor to help package and send out the orders.
Using a 3PL has several advantages. Yes, it might involve a significant chunk of your shipping budget compared to in-house shipping, but ultimately, it might be the optimal model. Here are some notable benefits of hiring a 3PL for your crowdfunding venture:
- Far-fetched as it seems, hiring a 3PL might be cheaper than performing in-house fulfillment. This is especially true if you have several orders, and you have to rent a warehouse or ship across borders. Also, you don’t have to hire a full-time staff dedicated to packing your orders.
- Order fulfilments can take a significant time. Not to mention the hassle of managing and doing payroll. On the other hand, outsourcing this aspect of your crowdfunding journey can save you time to redirect toward more growth-oriented duties for project development.
- 3PL companies have advanced infrastructure, a well-trained workforce, up-to-date security systems, and proper protocols to make order fulfillment precise and efficient. In short, there is minimal room for error.
- Most 3PL organizations working with crowdfunding ventures have a feature of syncing up with prevalent crowdfunding platforms. This enables streamlined onboarding and easy transmission of backers’ data.
4. Shipping costs
Determining your crowdfunding campaign’s exact shipping costs can be daunting. Unfortunately, it gets worse, considering there isn’t a hard and fast rule since all projects vary and have unique preferences. The good news is that software such as Easyship can help figure out what to expect. Also, the following factors will help demystify the shipping process and expenses:
- Distance traveled- Your backers’ location will determine the shipping expenses. The general rule of thumb is that the further you have to send orders, the higher the shipping costs.
- Taxes and Duties- First and foremost, shipping orders to backers beyond borders adds a layer of complexity to the fulfillment process. A reputable 3PL can help navigate this tricky process. Nonetheless, it’s vital to determine who’s liable for shipping and customs duties.
- As highlighted above, package size will determine shipping costs. In addition, if your products are high-end, you also have to consider insurance policies.
- Warehousing and documentation expenses.
5. Constant communication with backers
Your backers are the most loyal supporters of your campaign, and therefore it’s best to keep them in the loop through the entire shipping process, even in case of any mishaps. This, in turn, establishes credibility around your campaign. In addition, investors will have several queries and concerns through the fulfillment stage. Responding to relevant questions timely and efficiently is a great way to maintain goodwill and trust.
There is a lot at stake when handling and managing your crowdfunding fulfillment phase. Campaigners should start planning for this critical stage early, even before launching their campaign on crowdfunding platforms. Also, you don’t have to handle orders on your own. Outsourcing a reputable 3PL company can streamline the whole process.