Posted by Erik Dahlman on August 28, 2014
When I first started on Kickstarter, we made the mistake that almost every project creator does. We wanted everyone to back our project and we were prepared to do anything to make it happen.
We offered decks for $9. We sold prints for $3. And once we even tried free international shipping.
Shipping in general has been a pain point (this is actually the third post I’ve written about it), but international shipping is REALLY painful. I’ll break a few things down, starting with how it influences our current campaign for Ghostbusters, all the way down to why we no longer offer it on our website.
The crazy thing about shipping is that even though backers know it exists, many of them seem blind to its impact on your pledge levels. I’ve already heard several times on our Ghostbusters project that $15 seems a bit high for a deck. If we were charging $15 for just a deck, I might agree with you. But here’s what $15 is really paying for:
You can see that shipping accounts for almost a third of the total cost. And for anyone doing the math, $1.4 for 2500 decks is about $3,500 for roughly 3-5 months of work. Don’t quit your day job :-)
[For anyone that’s watched Doctor Who, shipping is like The Silence. Even though you just read this, the next time you look at a pledge you’ll forget that it was there.]
Now that we’ve looked at domestic shipping, how much is international shipping? That’s a more complicated question.
Let’s look at what the process was for us to ship internationally:
This process can mean a package isn’t delivered for 4-6 weeks.
Each of those points added up is the first cost. I say first cost because there is a very real opportunity cost that comes with shipping packages internationally.
That cost is time. Time to answer emails about where a package is, why it’s been a week and they haven’t received it yet, why they have to pay customs fees, and in Brazil’s case, why it’s never made it through customs.
We spend time trading emails back and forth to let them know if it’s returned we’ll let them know and send it back. Then we answer follow up emails about if it has showed up or not (it can sometimes take 3 months to be returned).
This can be 30-60 minutes minimum for an international order that has gone wrong. If you have even 50 orders that have these kinds of issues, you’re looking at an entire week’s worth of work replaced with answering emails, repackaging shipments, and filling out additional customs paperwork.
The first time we didn’t offer international shipping was on The Goonies project. We didn’t have the licensing rights to do so and it gave us a chance to finally see how quickly we could deliver when we only shipped domestically. So far it’s taken me about 16 hours to package and mail more than 60% of what we have.
To put this into perspective, I spent 12-16 hours a day for about 40 days to mail everything on our Call of Cthulhu project.
We recently turned off the international shipping completely for our website. There were three primary reasons for this:
Cost: We were losing money on some orders because of how expensive it was to mail to certain countries. Since our software doesn’t allow us to change shipping based on country dynamically, we were sometimes paying $50 in shipping on a $200 order.
Fraud: I’m looking at you Singapore. We had a couple people using ‘stolen’ credit cards that were shipping to their billing addresses. Once they received the products, they reported the order as fraudulent. This created a lot of paperwork that we needed to fill out and we somehow still lost the dispute, costing us $300 in sales plus the cost in shipping and our time.
Flexibility: The software we use does not allow us to restrict which countries we can sell to. I would have to periodically check orders to make sure that we weren’t accidentally sending a product we weren’t allowed to because of licensing rights.
No, not at all. I hope nobody walks away from this thinking that.
What I do hate however, is inefficiency. The process, all the way from packaging and labeling our own packages, down to answering emails about already mailed packages, is completely inefficient.
It costs us a lot of time and a lot of money. So I removed it.
But hope is not lost. We have been working to find distributors that we can sell our products to. This should be a win-win for everyone involved:
We’re hoping that using a more traditional distribution model we’ll be able to get our products into more people’s hands at a better price. This will also free us up to work on more creative endeavors instead of personally handling the logistics of individual order fulfillment.
We’ve spent a lot of time refining our international shipping process and trying to bring our rates down. The end result was that we discovered it was better for everyone in the long run if we didn’t try to do it ourselves.
International shipping has some constraints on your business because it’s:
There is a large time investment when dealing with international shipping and the customer service issues that are related to it.
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