4 Reasons Why International Shipping DOES Work for a Kickstarter

Deadly Fredly’s post yesterday around Why International Shipping Doesn’t Work For A Kickstarter brought to the forefront some very real growing pains of Kickstarting a business.  As makers, shippers, and general behind-the-scenes logistics sherpas for some wildly successful Kickstarter clients ourselves, we’ve seen many of these issues first hand.

Perspective is everything, though. When you evaluate a single Kickstarter campaign in isolation of the rest of your current and future business, the dollars dwindled away to international shipping premiums can seem enormous, but is that the only way to look at this issue?

To Deadly Fredly’s insights, we would respond:

1. Each member of your backer community delivers lifetime value beyond one campaign.

International shipping costs can eat up some of the revenue of the pledge. This does not render the contribution moot at all.

  • First, this isn’t a zero-sum game. Backers whose contributions end up closer to breakeven, particularly if you are able to limit these to minority tiers, are still extremely cheap customers to acquire. You may not profit from them on this particular campaign, but they are now customers. You can market to them in the future!
  • Second, Kickstarter is a powerful, still-evolving social layer unto itself. For example, it enables people automatically to learn about projects backed by their friends. Its template, targets, stretch goals, backer updates, and other tools produce network effects that can help you build your community and grow your project and business. Involving international backers expands the possible community who can participate, and such networks become more valuable as each person joins.
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2. Kickstarter is not simply a transaction engine. Patronage is also at work here.

Passionate people who are invested in your community and your success will pay a bit more for shipping to get something of high perceived value to them. How much more? More than you might think. International customers are used to paying higher shipping rates across the board.

You can also reward international backers with special freebies. If you choose to charge significantly more for international shipments, what about offering those backers an exclusive (but cheap to produce) incentive?  A cool bookmark? A badge?  Something that might add <$1 in cost to you can still add a ton in perceived recognition and value to the international customer.  In the end, no one backing a crowdfunded campaign is expecting Walmart-level pricing on products. They’re often already paying MORE for the chance to be a patron.  So why not recognize their heroism in a low cost but meaningful (high reward) way?

There is also a lot more to fulfilling a Kickstarter campaign than just the reward items. Backer updates and other open communication are a big part of the value to the backer and have no shipping costs at all.

3. Kickstarter Creators should take a broader view of margin.

Fred advocated analyzing margin (pledge dollars minus product and shipping costs) at each tier. Amen. Understanding the numbers is fundamental and critical.

  • Rather than seeking the same percentage margin goal for all tiers, allow margin goals to vary by tier and/or for domestic versus international backers.
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Your Margins May Vary.  And that’s a GOOD thing.

    For example, movie theaters don’t make as much on tickets as they do on concessions.  Distributors may make more money off the same product selling to one customer than they do to another.  It’s common practice, and while it doesn’t mean that you should get into the practice of dismissing international tiers as loss leaders, it does mean you should feel free to consider international tiers a product that will likely yield lower margins. That’s perfectly normal.

    Look for creative ways to offset international expenses. If you feel your international shipping rates are far too high to be fair, consider looking at your domestic tiers, to see if an across-the-board price lift might offset the international premiums. What if you had even $0.25 or $0.50 cents extra for each domestic backer? And if you offer a digital download anywhere in the mix, those backers bring zero shipping costs. (For example, Zach Braff’s Kickstarter captured $386,670 for purely digital rewards, which represents more than 10% of the $3,105,473 he raised.)   

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$91,330… for a PDF!  Nice.

Lastly, also appreciate volume discounts for production. While international backers may bring additional shipping expense, they also bring unit demand that could help you achieve deeper volume discounts in production, which benefits the economics of domestic and international backers alike. Bonus!

4. An expert partner can add tremendous value.

Several times, Deadly Fredly talked about weighing the monetary cost of every decision vs. the impact it will have on his time. For example, he stated that only launching one international tier priced at $150.00 would yield the best margin return, but would cost him in time responding to the hundreds of complaints for offering so few international options.

In the comments, he even addressed the potential value of using a third-party vendor to handle customer service and fulfillment, but quickly dismissed the idea due to his hesitation to work with an unproven vendor. He’s completely correct on this one: never trust your brand, your products, and your reputation to a company or consultant that has not earned that right.

There are companies who deserve your consideration, though, our own being among them. If Kickstarter is a big part of your business model and your campaigns are wildly successful, you need a strategic partner to free your time and maximize your return on contributions.

Consider just a few of the ways a proven vendor could help you:

  • Reliability at scale. Domestic and international fulfillment can be significantly faster when you work with an expert in warehouse and order management who can ship tens of thousands of shipments in a shift.
  • Dedicated customer service to you and your backers. Can’t handle all the questions, order-status inquiries, etc.? We can, following guidelines you set. Amplifier does this around the clock for some really amazing companies who are very serious about their communities.
  • Integrated production. We also make many items popular as Kickstarter rewards. Having production handled inside the fulfillment warehouse saves significant time.
  • More time for your community. With a reliable operation powering your making, fulfilling, and support, you can focus more time on backer updates and communication, which will help this project and beyond.
  • The knowledge and infrastructure behind some of the most successful Kickstarter campaigns and for what comes next.  The right partner can help you deliver on a Kickstarter success and also as you move into the future. Leading Kickstarter consultants and massive Internet communities such as Reddit, Breadpig, MailChimp, Glennz Tees, Rooster Teeth Productions, and Achewood utilize Amplifier as the merchandise-logistics backend for some of their enormously successful Kickstarter campaigns, ecommerce shops, and more.

Thanks again to Deadly Fredly for the thought-provoking post.  We pay close attention to the unique challenges that professional Kickstarters encounter, and we relentlessly chip away at them one by one.

Stay tuned, and please hit us up with your campaigns, questions, and general Kickstarter rabblerousing.

Join our clients Rooster Teeth & LIVESTRONG this Wednesday

Rooster Teeth’s Gavin Free (left) & Burnie Burns (right.) 

We just learned that – in addition to Alexis Ohanian – two other Amplifier clients will be speaking Wednesday.  Rooster Teeth’s Burnie Burns and Gavin Free along with LIVESTRONG CFO Greg Lee will speak about the “Alternative Business Models” powering their respective businesses. If that weren’t enough synchronicity, Goodwill’s Michael Willard will be joining them. Goodwill honored Amplifier with their Business Partner of the Year award an event last week.

In the words of The Alternative event organizers:

This event will focus on alternative business models companies use to run their business. There will be guest speakers from a variety of different businesses and organizations present at the event to talk about what methods and strategies they use to run their company. These strategies are some that are not normally seen in the business world and are thus harder to study in an average classroom.

EVENT DETAILS:

Who: Rooster Teeth, Livestrong, Goodwill and more.

When: Wednesday, October 30, 2013 6PM

Where: Welch Shell Auditorium (WEL 3.502) at the University of Texas at Austin

More information here.

Trust us, the only excuse you have for missing THIS event is that you’re attending Alexis’ talk (and/or vice versa!)

Amplifier Client & REDDIT founder Alexis Ohanian in Austin Wednesday, Come Hear Him!

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We ran into Alexis (right) two weeks ago @ JFK Airport

Alexis Ohanian has done more before 30 than most people do in a lifetime.  In addition to co-founding powerhouse community Reddit, he’s created a thriving not-for-profit called Breadpig, acted as an angel investor to the likes of Hipmunk, Hubspot, Crowdtilt and helped stop antipiracy legislation on Capitol Hill.  Alexis’ most amazing achievement may be that despite his success, he remains one of the nicest people you will ever meet.

Alexis and his epic tour bus rolls in Austin this week. This Wednesday, he’ll be speaking at the University of Texas about his new book WITHOUT THEIR PERMISSION. 

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If you live in Central Texas and care about entrepreneurship, the future of the Internet or making the world suck less, then don’t miss your chance to hear Alexis speak.  Here are the details.

EVENT DETAILS:

Who: Alexis Ohanian

When: Wednesday, October 30, 2013 from 7-9:00 PM

Where: Burdine Hall Room #108 • 110 Inner Campus Dr Austin, TX 78712

Get Your Free Tickets Now

Alexis is no stranger to Austin. While this Brooklyn diehard isn’t quite shopping for houses, he did recently tell an interviewer another primary motivation for his stop in Austin.

“Austin is a hub for tech. There’s a tremendous tech community there and it’s nice to come without South By Southwest going on all around me. It’s also one of the largest universities in the nation so to reach such a large chunk of students is a great opportunity. I’m also coming for the tacos. I should make that clear.

He ain’t lying, he loves him some breakfast tacos!  Now sign up and get ready to listen to someone drop some science.

Girl Scouts visit Amplifier, forget to bring us Thin Mints

We’ve hosted book signings and Kickstarter mavens but yesterday’s visit by Girl Scout Troop 1252 will go down in Amplifier history as our first time staging an actual merit badge challenge.

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We’re pretty sure these girls will grow up to be creative kingpins. Every year, they design and print their own troop tees, with stencils and ink and amazing DIY grit and gristle.

This year, they asked us if Amplifier would teach them to screen print for real. Who can say no to girl scouts, even when they aren’t selling cookies?

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Our screen printing man, myth, and legend Chris Vreeland taught them the printing process, from art to film to screen to tee, and they took turns printing and curing their very own t-shirts.

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The shirts look amazing. We’d like to say you can get your own Troop 1252 tee in our online store, but you can’t. That would be… strange.

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Thanks again for stopping in, taking the tour, and brightening our day with your questions about screen printing, glitter ink and unicorn posters, Troop 1252. Let us know when you’re old enough for summer jobs!

Amplifier All Hands Meeting

All Hands Meeting

Yesterday, March 27th, we held an all hands meeting at Amplifier. During yesterday’s all hands meeting, Everyone ate huge, ridiculous, almost debilitating portions of Rudy’s BBQ.  Pretty cruel when you consider that after the meeting everyone had to go back to work instead of take a nap.

We surprised the crew by handing out embroidered Red Kap workshirts. (If you don’t know Red Kap, they make some of the best work wear in the business.)  We thought it would be cool to color code our teams by their department. Do so enables visitors to instantly grasp what’s happening in the often raging sea of activity on a typical day. 

Color schemes were: 

5 Year Jerseys

We also took a moment to recognize employees who had put in more than 5 years at Amplifier with a special handmade flannel baseball jersey.  We do hard work here.  Anyone who has made it five years has put in unbelievable hours. No matter what their department, it’s a given the “5 years” have packed thousands of orders, worked many a holiday, and generally done so with a great attitude.

These jerseys were a secret. Only our founders knew about them.  We just asked employee for their favorite number between 1 and 100.  They didn’t know it but they were picking their team number.  

  • Joel Bush - #1
  • Paco Contreras - #20
  • LeVar Fresch - #77
  • Jud Harris - #67
  • Topher Hyink - #17
  • James McNown - #2
  • Doug Sewell -#33
  • Jef Sewell - #00
  • Macon Stokes - #7
  • John Totman - #44
  • Chris Vreeland - #23
  • Terry Wallace - #3

Very soon Tanya Johnson and Cody Isaacks will join the 5 year club.  We hope everyone working here today sticks around to earn a jersey.  They’re a great crew and we’re proud of all of them! 

Rooster Teeth's Burnie Burns on/is the Future of TV

Rooster Teeth’s Burnie Burns joins Kevin Smith, Lisa Kudrow and others to discuss the Future of TV.  The thing is, Burnie and his wicked crew don’t need to speculate on where the Internet is going in the future.  They are BRINGING THE FUTURE into the now.  If you have ANY interest at all in where Internet, community and original content is going, you need to study every word that rapidly fires out of Burnie Burns’ mouth. 

Filmmaker Kevin Smith (Clerks, Chasing Amy, etc.) summed up Rooster Teeth’s amazing accomplishment like this. “You’re my hero man, your generation is doing what we dreamed about doing… We’re like ‘We want to be independent!’ but we weren’t, ultimately we sold out.  You guys truly are independent, and you’re doing it from a great place, like, 'this is what we love to do.’ You’re like, 'I could wait for somebody else to give us some loot or I could build what I want over here.”

Follow @burnie and @roosterteeth on Twitter.