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.