7 - Shipping and Warehouses

A third crucial factor in determining the selling price is shipping costs. Of course, one can handle the shipping personally and save some money, but there are many pitfalls. The more successful a project becomes, the more space is needed for full pallets and packaging cartons. While shipping and packaging materials might be slightly cheaper than using a warehouse, one should not expect significant savings for the considerable effort involved. Additionally, Kickstarter backers will also face some inconveniences.

That is why, for Magical Friends and How to Summon Them, I will definitely use warehouses that handle the shipping. These can be found online under Fulfillment Centers. One important aspect of shipping is customs. My manufacturer, Longpack, even offers direct shipping to Kickstarter backers, but the shipping costs to Europe and the USA are relatively high. While one could save part of the freight costs to warehouses (I emphasize "part" since excess inventory still needs to be stored somewhere), this is not enough to compensate for the lower shipping costs from a warehouse in the USA or Europe.

How many boardgames might be in there? Photo by frank mckenna on Unsplash

Moreover, customs can be quite troublesome for Kickstarter backers. If I ship my freight to Europe and the USA before distributing it to backers, I pay customs fees based on the manufacturing costs. For instance, I would be charged customs duties on €15 for manufacturing + freight. However, if I were to send the board game directly to backers in Europe or China, it might get stuck in customs, and buyers could end up paying customs fees on the €70 purchase price. Since about two-thirds of Kickstarter backers come from the USA and one-third from Europe, it makes sense to store the goods in warehouses—such as Quartermaster Logistics in the USA and Happyshops in Europe—before forwarding them to backers. If you request pricing lists, you will quickly notice that this approach results in much better shipping rates for the USA and Europe.

It is not uncommon for Kickstarter projects to partially subsidize shipping costs in certain regions. However, this must be carefully calculated. The final price should not exceed what backers are willing to pay. Customers usually resist paying more than 15% of the product price for shipping. The remaining shipping costs must be factored into the product price. Unfortunately, for customers outside of Europe or the USA, the price will be higher. However, if a Kickstarter campaign attracts a large number of customers from a specific region—such as Australia—it might be worth looking into an additional warehouse.

Shipping is a critical expense in any Kickstarter project, and miscalculations can quickly lead to financial issues. I hope this post has provided some insight into the topic! If you have questions or suggestions, feel free to leave a comment—it might help others as well. You can also send me a message.

One year after the Kickstarter:
Interestingly, the ratio of USA orders to European orders in my Kickstarter turned out to be closer to 1:4—meaning significantly more European backers. Many of my buyers came from local events and conventions, which likely explains the higher number of European supporters. I believe the more backers a project gains, the more the ratio shifts. Establishing a strong presence in the USA has been challenging for me. For a future Kickstarter, I might reduce the inventory shipped to the USA, as selling off surplus stock has been difficult, leading to additional storage costs.
Another point: Sometimes, I also send packages from home. Even for these individual shipments, sending them from a warehouse within Europe is still cheaper, despite the significantly higher effort involved. I’m not sure how things would look with a shipping contract for a larger number of packages.
At the moment, customs duties in the USA are also an issue—I hope there will be better news on this soon. Until then, this remains a challenging topic in the USA.

4 - Your Jobs as a Kickstarter Creator

While Kickstarter projects can be small-scale, if you aim to launch a board game that fits the market in terms of price and quality, there’s a lot to do. You can only set a competitive retail price starting at production quantities of 1,000 pieces (in some cases, 500 pieces). Selling that many copies is no easy task.

Many of these tasks can be handled by yourself, with friends, your team, or by hiring someone. The more people you pay, however, the higher the financial risk.

Business Management: If you want to avoid losses and make a profit (even a small one), you’ll need a company. Establishing a company entails several steps. You’ll need legal advice (e.g., for copyrights, trademark laws, taxes) and have to handle bookkeeping, plan income and expenses, and assess risks. In Austria, there is good support available when starting a business.

Game Design: You’re likely handling the game design yourself. What you’ll need, however, are game testers. While friends might be sufficient at first, you’ll soon require external testers and eventually blind testers, who test the game solely using the instructions. Multiple rounds of testing and revisions are necessary, with both voluntary and paid testers available. The tighter your project timeline, the more likely you’ll need to rely on paid testers.

Illustrators and Graphic Designers: Illustrations are crucial to bringing your game to life and creating its atmosphere, as well as attracting potential customers. While simpler art styles can also be effective, the illustrations must look professional. Hiring an experienced artist is a worthwhile investment. Graphic design is equally important. While some stunning artwork may need to be adjusted for clarity, a well-designed game is essential. Illustrations and graphic design represent one of the first significant financial risks before launching your Kickstarter.

Translators and Proofreaders: Spelling errors can appear unprofessional, especially in promotional materials such as newsletters and websites. It’s equally critical to ensure the quality of the game manual. Others should review your materials, and for the final product, a professional should thoroughly examine your game.

Manufacturing and Shipping: You’ll need a manufacturer and will have to gather quotes to find the right one. Collaboration with the manufacturer is key. To transport finished games to your storage or warehouses, you’ll also require a freight company. Your Kickstarter campaign helps cover these initial production costs.

Shipping: While assembling and shipping packages yourself is possible, a successful Kickstarter will demand more space and time. Fulfillment centers can take over storage and shipping, saving you considerable effort. Though this service is pricier, it minimizes logistical challenges.

Marketing: If no one knows about your game, no one will buy it. You’ll need a website or landing page to drive interest in your newsletter. Newsletters are essential for keeping potential customers engaged over time. A well-produced video and advertising campaigns (e.g., on Facebook) are necessary for your Kickstarter launch. Collaborating with bloggers and reviewers and showcasing your game at conventions are also effective strategies. Building interactions with potential fans is vital—they can convert into Kickstarter backers. Professional help can be sought for various tasks, but advertising represents another major expense before launching your Kickstarter.

Distributors/Retail: If your Kickstarter succeeds, you’ll need to navigate the retail market. Negotiations with retailers and distributors will be necessary.

Although you can outsource some tasks, you’ll still need to familiarize yourself with each step to accurately estimate costs.

During the Kickstarter Campaign: Everything comes into play, and the workload can easily become overwhelming. This period often brings a desire for additional support, with numerous offers from others—ranging from scams to genuine assistance. Be cautious, especially with promises of quick advertising results. If you’re exploring advertising support, it may already be too late. Researching reliable help in advance is advisable.

On a positive note, you’ll meet many people who genuinely support you, particularly in the areas of retail and distribution. Prepare for a social experience!

A team is super valuable!

I will get into more details with these jobs in the following Blog Entries

What experiences have you had with these tasks? Do you work in any of these areas? I look forward to your comments!