KS — How to best handle shipping

If the "extra charge" is +$10 and there are 200 backers that means $2,000 of monies that would get DEDUCTED from the Funding Goal... Using my earlier example where I had $3,000 left over (starting with $10,000), $2,000 would get deducted from my profits leaving me with ONLY $1,000 of profit...!

Do you see my concern???

Note: From the Kickstarter Help Knowledge Base.

Additionally, any funds pledged towards shipping costs will count towards your project's goal.

That's what I thought.

BackerKit = 2% KS Funding + 5% BackerKit Funding + $199 Setup Fee.

Not cheap! A bit exorbitant.

I really, really DISLIKE the whole business side to Game Design.

"SpellMasters" could be a very COOL game... But I get the impression it will be impossible to sell.

Each Player has their OWN "Grimoire". You may start the game with a NEW "Grimoire" with no additional experience or you can use a "Grimoire" that has already been played with. This means some levels of experimentation have already occurred, making the game a bit easier.

Each BOX is filled with items used by ONE (1) Wizard. To PLAY, you need a minimum of three (3) such boxes... The Player count goes from 3 to 5 players. For 5 players, you need five (5) boxes!

Where everything SUCKS is the Financial side of things. Art is about $2,000 and Creative Writing is around $3,000. So that's $5k + the manufacturing ($10k) and shipping ($5k).

Here's the kicker: each box has to be priced at $50 USD! 3 Players = $150 USD. PLUS $20 USD extra for the board. Total = $170 USD + SHIPPING! $30 USD is paid for shipping, PLUS "extra" shipping (for International/Outside the USA).

The box costs me $20 USD to make, +$10 USD standard shipping, leaving $20 USD of profit. I know it SOUNDS like A LOT. It isn't. Once you take out all the various expenses: I make $4,500 USD with 500 backers (goal of $25,000 USD). I basically make $9 USD per box! Not unreasonable...

The business side is killing me ... even if the Art and Writing are reasonable in term of cost. I don't know of anyone who wants to spend ALMOST $200 USD to be able to play a GAME!!! Even IF it is super cool, intricate and challenging!

Thoughts???

That's "The Game Crafter" (TGC) price. Don't forget each "Grimoire" has it's own box and contents. I know I could probably shop around via a US Broker (AdMagic, QPC) and probably shave a few dollars ... but makes everything more difficult for me.

With TGC they simply make the "sets" people buy.

I've been doing some "re-factoring" and I could probably get the Reward price to $35 USD per set (Single Game Box).

It would still cost me $20 USD to make and I would DIFFER shipping to the Pledge Manager such that I can drive DOWN the Funding Goal and have shipping be paid afterwards. But I would be upfront about shipping fees ... Just collect the monies afterwards.

So the price would be 3x $35 USD + $20 USD + Shipping (in the US, that would be +$24 USD). And they would need one Encounter Pack (+$10 USD). So a Grand Total = $159 USD!!!

But the average purchase would be only $129 USD (because not every purchase requires a Board or Encounter Pack...)

Less than $200 USD... But still *ouch* pricey!

Has anyone used Pledge Manager, Backer Kit or Crowd Ox for handling shipping and additional "extras". I know my Publisher has used "Backer Kit" ... but I find the cost rather EXPENSIVE. Right now I know that "Exploding Kittens" which made Millions of dollars used "Pledge Manager". I have not investigated them ... and really only know the little information provided by their website.

Says that the fee for using "Pledge Manager" is "per Backer". The more backers, the more expensive the service. I really don't know if this is sufficient ... because I'm not 100% sure about what "features" they offer. Says something about shipping and customization needs. However I get the feeling that it's more of a "consulting experience" which worries me that it will cost a SUPER HIGH PRICE!

Specifically again, ANYONE with "Pledge Manager" experience???

I'm not impressed with Backer Kit and Crowd Ox looks very confusing. I like things to be simple and obvious, not veiled in mystery and techno babble.

Anyone???

The shipping charge by my projections is between $6,000 and $30,000 dollars!

It obviously depends on how many backers I get... but even on the LOW end of 500 backers, that's $6,000 USD going towards my Funding Goal. I would rather prefer getting that money AFTERWARDS so that it does NOT contribute monies to the Funding Goal.

Right now, I am interested in "Pledge Manager" designed and operated by KickTraq.

$6,000 "extra" or real money going towards the Funding Goal is IMPORTANT! Either I lose $6,000 in Funding OR I get shipping added in "Pledge Manager". I think it's stupid to "lose" $6,000 just because it's monies-in/monies-out.

It allows me to have a smaller Funding Goal ($17,500 USD) otherwise the goal would be closer to $25,000 USD and that should be 750 backers without the shipping fees. See what I mean??? You lose out on funding because of the shipping fees.

So by my estimates it's more logical to charge the shipping in "Pledge Manager" and DIFFER the cost (and get the full benefit of your Funding Goal; by being able to lower it).

And like I said, I'll be honest and post the shipping estimates on the KS page. It's just I don't want it to be a part of the monies that I earn. By my examples, it should be obvious now why... !

Where I feel differently is the $17,500 vs $25,000 Funding Goal. Yes if you feel like you will get a lot of backers maybe it's true that those two goals are relatively identical.

However $25,000/500 backers = $50 per backer. And $17,500/500 = $35 per backer...

There is quite a drastic difference! Even if the balance ALMOST equates the shipping fees ... That amount (for shipping) can be lower with more copies being sold. Let me explain:

If $50 per backer includes shipping, each time you buy a copy of the game you are charging more shipping. So if you order two (2) copies, that's $100 with about $30 included shipping.

In the second scenario with $35 per backer (and no shipping) if you buy two (2) copies it's only $70 plus maybe $20 of shipping. And therefore less expensive as it's two (2) copies for about $90. Backers will be SAVING about $10 off the price because the shipping costs were differed. Because it's like $8 per copy + $4 insurance.

So the conclusion is that instead of having to UP your Funding Goal, Benefit #1 is a LOWER Funding Goal, Benefit #2 is you are saving 5% on KS Fees and Benefit #3 you are charging less to backers (with the purchase of multiple copies).

I think this perfectly illustrates that charging the shipping during the surveys (after the KS) is a Win-Win for both the project creator and the backers.

And I wanted to just ADD a brief thing about the Funding Goal: sure if you have thousands of backers it doesn't really matter. But if you are like most starting campaign which will only have 500 to 1,000 backers, lowering that goal can have several side-effects:

1. People perceive that you are looking to collect LESS money from the goal.

2. People see that the reward levels are less expensive.

3. It might encourage more backers coming on board because of #1 and #2.

The only downside I see is "conversion rates" may be affected. But here's the real HONEST aspect of this concept: you post a chart with estimates for the shipping according to different countries. Then when you come to completing the surveys, we have already established that shipping fees will be more accurate and save backers some monies (as shown above).

But maybe I might lose people in Australia who know shipping is expensive. However, I'm pretty darn sure at $50 ... or $100 for two sets, they probably wouldn't buy-in anyways. So I don't see this as a consequence that would affect the "conversion rates". It's just some people will not want to get on-board because of the higher cost to buy the game.

I stand corrected. It is possible to setup multiple Rewards for various quantities, each with their own "Shipping fees".

Very true... (See I'm not always right!) I guess it's because I am totally absorbed by my Excel spreadsheet and it's very cut & dry: reward = X, shipping = Y. Not multiple rewards, just one giving me a "forecast" if you would like (I can't find a better term) of what sales from a KS would look like.

And the shipping = Y is like a subsidy with built-in pricing in the reward.

Still with multiple rewards, you could of course vary that pricing and change the reward = Z (where that's another amount for multiple copies)...

So yeah... It's just because of how I am trying to estimate things ... that got me thinking that shipping was a FLAT FEE (included in the reward). But it's not... Fair enough (now you make me want to have a better spreadsheet! :P)

I still disagree that the Funding Goal should include "Backer Shipping". IF my Funding Goal is $25,000 WITH Shipping, it makes more sense for it to be less and be $17,500 WITHOUT shipping. IF this lowers my rewards from $50 USD to only $35 USD ... you can see the attraction.

Backers may be *hesitant* to back at the $50 USD level. However if the reward is only $35 USD + Shipping... That has the benefit of making the Backers understand that the cost of the game is ONLY $35 USD and that the shipping to Backers is "extra".

Instead of having to design a Pie Chart that nobody looks at... All they do is look at the REWARD LEVELS... And come to the conclusion that $50 USD is too HIGH!

Removing the Shipping ... illustrates how the Reward is LESS EXPENSIVE, I pay LESS KS Fees and Backers get a more HONEST level of pricing.

If you cannot see this... There is nothing I can do or say to convince you. The bottom line is that SHIPPING is a Monies In/Monies Out situation. You make NO MONEY on it and it should NOT be part of your Funding Goal (IMHO)! Making your goal $17,500 USD to $25,000 USD is quite a large increase which might be a put-off for some Backers!

I fully comprehend the "conversion" issue... And how some people can "feel" *miffed* when they see the additional amount.

But I'm not doing this to "trick" people to pledge and then say "Hehehe you need to pay an additional $15 for shipping!"

My goal is to POST said Shipping Prices in a nice "chart" DURING the CAMPAIGN ... which is only an "estimate" but I will do my darnest to TRY to equal those amounts or only be off by a couple of dollars.

I'm not trying to use the shipping as a way to coax backers. People will be able to do the math themselves and see if it's worth their while.

I understand the "potential" issue...

Note: And if you think about the "real world" like Amazon or any other website selling you something... You get the PRICE of the item in question and then at "check-out" you get the cost of shipping and usually there are options according to how fast you want your item to be delivered... So it's "price of the item" FIRST and then SHIPPING.

I know Amazon offers discounts like buy more than $X dollars and you get FREE shipping... I'm just trying to illustrate that most times in sales, the cost of shipping is added LATER.

My main concern is that the price of shipping GOES UP from when I start the campaign to 30 days later when the campaign ends.

That's why I stated it may be only a couple dollars at most. I can't do like with the manufacturer and get a quote which is valid for 3 or 6 months (and the prices are "locked in" and need to be honored).

The shipping fees are subject to increases at any moment and there is no direct relationship with the shipping companies (in my case anyways...)

Note: Ideally I would put the "disclaimer". Because $1.00 on 1,000 units is $1,000! And I'm not saying if I am wildly successful ... The campaign in is in an "every dollar counts" type of scenario... If that was not the case, I would have left shipping in the price of the Reward (to simplify my life).

But it can be a not so "insignificant" amount... in the end. So I'd just be worried that I won't "eat" that extra $1.00 because of the total impact. But this is in the worst-case scenario (where shipping or insurance prices go up by a small amount)...