6 Ways to Fulfill Your Crowdfunding Promises
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Everyone’s talking about crowdfunding right now. There’s good reason: The practice has redefined the funding landscape by providing an attractive avenue for entrepreneurs to not only raise funds but also use the platform as a way to launch a sustainable business. While crowdfunding’s benefits are plentiful, timely fulfillment is a daunting challenge that all campaigners face.
Through Indiegogo, my company, SkyBell, raised almost $600,000, fulfilled its perks only four months later. The campaign served as as a launchpad for my business.
Thinking of crowdfunding but unsure how to execute the business end of the process? Here’s how you can carry out your vision, fulfill your orders and turn your campaign idea into a sustainable business.
1. Validate the product idea.
It’s wise to validate your product idea before the campaign begins. Confirm that the company's idea is realistic, economically feasible and that the production can take place at the proper scale during and after the campaign. The last thing you want to do is launch a campaign, raise funds and then realize that a product idea not possible, will take twice as long or end up costing far more than what was charged for the perks.
Meet with engineers and developers to create a prototype, build a production schedule and confirm that they have the capability to carry out the plan.
2. Calculate total per-unit costs.
Accurately price the perks and set a funding goal to cover all the costs and absorb unforeseen ones. To do this, understand the total per-unit costs up front.
Be sure to consider all expenses, including the costs of manufacturing, readying the product for retailing, shipping, packaging, fulfillment labor, software development, servers, billing, customer service and marketing.
3. Don’t forget the packaging.
Packaging is the speed bump that entrepreneurs never saw coming. Find a packaging partner and consider a few design options. The price of packaging can vary according to size, design and materials.
Confirm the full timeline for everything that relates to the product, including artwork, creation of molds and producing and delivering the packages.
4. Weigh all the shipping variables.
Shipping can quickly add costs and time to the process. Consider domestic and international rates. To ship overseas, be sure to quote the package's weight and dimensions so as to accurately charge international customers during the campaign.
5. Overseeing the fulfillment process.
Entrepreneurs who fulfill orders themselves should be sure to factor in an estimated per-unit time for physically putting a perk in the packaging and preparing it for shipping. Factor this into the target date for delivery.
For larger operations, review estimated costs of having packages prepared by a fulfillment center. Factor this into tne per-unit cost and consider the timeline for setting up and executing the packing.
Indiegogo has helpful tools to streamline fulfillment. Be sure to take a look.
6. Tackling billing.
Billing can get real messy, especially with international customers. Create spreadsheets to accurately track payments and international shipping charges. Every minute spent planning can shave 10 minutes from a campaign.
While handling these details might not be as thrilling as raising funds part of the campaign, they have a direct impact on an entrepreneur's ability to execute his or her vision, fulfill orders and make the transition from a campaign into a fully sustainable business.