Kickstarter Pledges: Avoid the Loopholes

Back in the day I used to play a card game called Magic: The Gathering. I remember an article written at the time about three different types of players. There was Spike, the aggressive competitive player, Timmy, the player that likes to win big with big creatures, and Johnny, the shifty player that wants to screw with you. I was most definitely a Johnny.

I would spend days going through each new set trying to break the game with infinite loops and freezing my opponents in stasis locks. As game designers, guys like Mark Rosewater had to keep in mind that there were people out there just like me, constantly trying to break the rules of the game for my own benefit. Those guys are still out there, and some of them are your backers.

Backers are Johnnies too

To me the spirit of Kickstarter is funding a project that wouldn’t normally ever see the light of the day if it wasn’t for something like crowd funding. It takes an idea and allows it to become realized and, many times, improved through feedback of those most vested in its success.

Unfortunately, I feel this initial intent has been bastardized a bit by the idea that Kickstarter is also a pre-order system. That it’s nothing more than a way to get products at a discount rather than paying full retail for it in a store later. This leads to the mentality that being a Johnny is okay.

What I mean by this is simple: some backers will try to manipulate your pledge levels to get the best deal. I don’t think many of them do it maliciously, it’s just human nature to want to get the best deal, but I think it goes against the idea of what Kickstarter is there for and as a project creator, you need to be aware of it.

To give you an example, I’ll use a Kickstarter project that I recently reviewed for someone. They had offered a pledge for $50 that was intended to give the backer a decent discount for ordering more copies of the product. Let’s say it was for something we have a little bit of experience with, like playing cards (shameless plug: see our current project, Synthesis here).

Don’t offer a loophole

Let’s look at two pledge levels:

Pledge A: $12 – 1 deck + $10 shipping
Pledge B: $45 – 4 decks + 2 dice + $25 shipping

You can add another deck for $11 and a pair of dice for $5

On the surface, Pledge B appears to be the better deal because you are getting decks and dice cheaper than if you added each one because you think $12×4 = $48. But if you start with Pledge A, add 3 decks, and add 2 dice, you end up with a grand total of only $60 ($12 + $10 shipping + $33 extra decks + $5 dice).

If you had pledged for Pledge B, you would have spent $70 for the same items. So as a backer you have gamed the system, but unfortunately for the project creator, shipping may still cost them $25.

Factoring in Kickstarter/Amazon fees and subtracting shipping, the project’s creator is only looking at about $29 on a $60 pledge (less than 50%) which is far from the percentage of reward costs that Kickstarter recommends to make them viable.

The process of finding all of these permutations can be time consuming and the more complexity you add to your project the worse it gets. Try to keep pledge levels simple and don’t get caught up in the whirlwind of hype and excitement that can come with a successful project campaign. If you aren’t careful, you can accidentally end up creating pledges that actually cost you money (trust me, I’ve done it before).

Take a look at the difference between our first deck project, Call of Cthulhu, and our current project Synthesis. You’ll see a huge difference in the number of pledge levels and how add-ons are handled. Remember that add-ons not only have the opportunity to create more loop holes, but they also have the potential to turn many of your pledges into custom reward tiers, something that will slow you down if you want to do batch processing of any kind during the fulfillment phase.

Thanks for taking the time to read this and check out one of our newest cards before it is released anywhere else. And don’t be a Johnny, at least not on Kickstarter.

jack-spades

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4 Improvements Kickstarter Needs for Project Creators

Dragon Whisperer is now our fifth successfully funded project on Kickstarter. I feel like we’re very lucky to have been able to fund five for five, but in the past year that we’ve been doing this I’ve found Kickstarter severely lacking in some areas when it comes to helping the project creator.

Shipping

There are a few aspects of shipping I think that Kickstarter falls down on. The first is including the shipping as part of the overall pledge amount towards your goal. This could be remedied by knowing what your shipping cost is and adding that to your goal, except that you never really know how many of your backers will be international or which pledge will be the most popular to do that.

Kickstarter allows pledges to choose a dollar value for international shipping, but it doesn’t allow this number to be set for different destinations. This is much less of an issue now that almost all international shipping is extraordinarily expensive, but when shipping to Canada and Mexico was less, it would have been nice to not force them to subsidize additional international shipping. On this point, I wish that US shipping was broken out as well. With Dragon Whisperer, the pledge level that nets you a single copy of the game is $25. Many backers may look at that and not realize that almost $6 goes to just the shipping alone; a fact that is easily forgotten given that everyone expects ‘free’ shipping domestically.

There are videos and articles on Kickstarter about many aspects of starting a project. The one I’ve never seen is about shipping. Which seems odd given that almost every project creator I’ve heard from states that shipping was the most under-estimated piece of their budget when creating pledge levels and goals. It would be good to have a chart showing domestic and international shipping costs for different weights to give project owners a comparison to their current offerings. Even better, why not have the approximate weight entered into the reward that would tie into the USPS API to give a ballpark estimate?

Email

Right now you can toggle between your Inbox and your Sent items and that’s it. That’s fine if you have less than fifty backers that never talk to you. But what about projects that have hundreds or even thousands of backers to communicate with? The messaging service is completely lacking in any search functionality. I currently keep all of the automatically generated emails Kickstarter sends me so that I can search on my own server, then click the link to tie back to the message on Kickstarter. Unfortunately, this only works for incoming since I don’t receive any notification for emails I’ve sent.

The system also kind of assumes that you will only ever run one project or that a backer will only ever back just one of your projects. When you have multiple projects and a backer sends you an email from one, you can’t see any correspondence you had from any previous projects. Many times I’ve had to ask backers to message me from the original project so that I could view the entire exchange. This is slow, inefficient, and makes the project creator look like they don’t know what they are doing.

Add-on system

Imagine this, you’ve come up with a very structured reward system but midway through your campaign, you have 2000 awesome dice become available that you’d like your backers to be able to add. The first problem you run into is trying to let everyone know that the dice exist. Not everyone reads the notifications (many even turn them off completely) and after they’ve looked at backing a project they probably don’t scroll up and down your main project page nearly as much as you do.

The second problem is that many people are backing a project for the first time. The entire process can already be overwhelming but to now have to know that you click “Manage Pledge”, change your dollar amount, and wait to be asked in a survey at the end of the project about what the extra funds are for isn’t very intuitive.

Now, let’s say this happened during…oh The Cthulhu Playing Cards project where you had over 2000 backers and not enough dice? How do you limit the number that are available? The answer is that you can’t. Most project owners have to ask backers to comment on an update in an effort to keep track of stock. This may work to a point but it is a very manual process and there is invariably the backer that does not follow directions and just adds funds only to be upset that they didn’t get the item they wanted to add.

I understand that Kickstarter doesn’t want to be labeled as a store, and it’s really not. But not allowing the ability to add a la carte items introduces a lot of inefficiencies in the process, especially given the sad state of surveys. Speaking of which…

Surveys

The scourge of any project as far as I’m concerned. I cringe at having to create multiple reward levels because these are so difficult to produce and track. As an example, assume that you have a project with 22 reward levels (like we did in Genegrafter, or the 26 in the Call of Cthulhu). For each survey, I had to manually copy and paste each question into the survey to cover all of the possible scenarios. This was even worse on the Cthulhu Playing Cards project that had about 24 questions per reward because of all the possible add-ons which meant I had to create a total of 624 questions. This could easily be remedied by allowing a survey from another reward tier to be duplicated.

And all of the entry fields are free text and mandatory. You know what happens when you give a backer the freedom to enter whatever they want and then make them do so? This…

responses

It also makes it more difficult to aggregate numbers on a spreadsheet when each of the following responses for a question are considered valid: one, 1, 1(one), I, I think I had one, just the one included, etc. The ability to choose an integer, string, or boolean type would be quite valuable.

And what if you manage to ask 624 questions and get a valid response on each of them? This is how it shows up on the backend:

responses_2

Well that makes perfect sense doesn’t it? I would say it would probably be better to either a) put the question next to the answers or b) just hyperlink to the full survey like they do when you are looking at a message from the backer. Which leads me to the final beef with surveys.

You can only look at the full survey report with the questions if you have sent or received a message from the backer. If not, there isn’t any way to bring up the full survey results. I really don’t want to have to spam everyone just so that I can get at the data that I need to.

Conclusion

In the past year I’ve been running projects, the main changes I’ve seen have been about font colors and sizes. A couple of weeks ago Kickstarter changed the text of “Sold out” to “All Gone!” Those seem like fine changes if any of these other issues had ever been addressed. Technically, the Inbox/Sent toggle is new as well but that’s a long way off from adding any real functionality when you have thousands of messages.

Don’t get me wrong, I love Kickstarter. Albino Dragon wouldn’t exist without it and it’s afforded us an amazing opportunity that we would have never had on our own. But as a programmer, there are a few glaring holes in the way the site works that I think could easily be remedied with a couple of good web developers. So maybe take some of the six million dollars that was made last year and help a guy out and hire some?

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Shipping – Or as I like to call it, “The fastest way to go bankrupt on Kickstarter”

We’ve taken a lot of flack for our high shipping prices. Many backers have told us that other projects only charged them $X so why is ours so high? The reason is pretty simple, because that’s what shipping costs.

Let’s take a look at a simple deck project like Call of Cthulhu…

A Simple Beginning…

2500 decks. That’s what we hoped to achieve in 40 days with our Call of Cthulhu Playing Cards branded with Bicycle. We thought, 2-3 decks would be a few bucks and maybe double that for international. Doing a quick weight calculation, we figured about $8 international would cover most expenses and anything over couldn’t be much more right? We couldn’t have been more wrong.

Within the first week we had already allocated about 5000 decks. And then we started looking for other cool stuff to add to keep the campaign going for another 30+ days. And that’s where we ran into trouble.

Look at your package size

Before you get started, you should really know how many of what you can fit into each package. We originally ordered a ton of 4″ x 30″ heavy duty mailing tubes thinking that we could roll an art print in there and put the decks down the middle. When we got the tubes, prints, and decks we realized that plan didn’t work because the decks could slide around and tear up the prints. So we taped the decks to the top of tube. Which would have been fine except for two issues

  1. The tape didn’t hold.
  2. The larger tubes were much heavier, pushing the total weight above 16 oz. The magic number is 13oz which we’ll explain below.

So we moved to two different models, depending on where they were shipped. The first was a 24″ x 4″ tube that could hold an uncut sheet and some prints and allow us to stuff both ends with packing paper with up to about 12 decks in-between. We used this method for international because it kept everything in one package and the cost usually between $20-$30. Packing the uncut sheets/prints separately would have been about $13-$16 plus an additional $17.

In the US, any number of decks over 3 immediately went into a small priority flat rate box. Unfortunately, only up to 8 decks can fit in such a box, so any pledges we allowed over this number either went up a size or into multiple boxes. A typical pledge would be a small flat rate box for $5.35 and a tube with a print for about $4 (including tube cost).

Because of the varying size and weight of each pledge, it made it difficult to establish a standardized packaging process. I ended up eyeing each one to determine what the lowest weight packaging would probably be, sometimes having to completely repack a reward if I was wrong. This might have happened because of extra packing materials, etc.

Every oz counts / Be careful with the add-ons

The biggest issue we ran into was once we started with the add-ons. While this gave our backers more reasons to throw money at us it also continued adding weight to each of the packages.

Let’s say an international backer started with a pledge of $15 for 2 decks with an international shipping rate of $8. They then added a coin, a poker set, and 4 dice. What we originally started with was a weight of about 8oz. With each of the add-ons weighing about 2 oz each, what we ended up with was closer to 14oz.

In the states this drove the cost up to a minimum of $5.35 (instead of about $2.30) and internationally to the tune of $16.95 (instead of about $8-12 depending on the country).

The key number to keep in mind is 13oz.

Anything over this in the US means you’ll need to go to the priority flat rate box ($5.85) I thought you said $5.35? I did, that was until January 27th. Guess what? USPS raised all of their rates substantially yesterday.
Remember, whatever the weight is, round UP to the nearest ounce. Here is a chart for current costs to ship various decks:
US
8 oz – 2 decks – $2.55
11 oz – 3 – decks – $3.08
4-8 decks $5.85

International
8 oz – 2 decks – $12.75
11 oz – 3 decks – $14.90
15 oz – 4 decks – $16.75
5-8 decks – $24.95

Art Prints

To ship these internationally was over $6, plus each tube was about $1. Charging $8 for an art print, you can see that we didn’t make anything on these and the $8 only covered the cost of shipping. The only way we ever saw any return on these was if a backer ordered up to 5 (anything over that required another tube).

So what was the damage?

To date, we have spent $13,700 on shipping and over $2200 in mailing supplies. An average of $7.20 per backer.
Taking into account the average pledge was $44 per backer, shipping accounts for roughly 16% of each pledge. Given that Kickstarter/Amazon can take up to 10%, you better make sure your cost to produce is less than 74% of the pledge amount.

average_shipping_chart

Handling

One thing we haven’t been charging for is handling. The numbers given here represent only the cost of the actual shipping. This says nothing of the countless hours (okay, I count close to 320) that are spent packaging, weighing, addressing, and filling out customs forms. My only job is to run the company and oversee things like this. The process took almost a full two months and of that, I made exactly $0. So next time you think you want to mail out over 2000 packages (so far I’ve mailed 2700+) think about what your time is worth. Because those pledges aren’t going to ship themselves.

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Why You Should Set Realistic Pledge Levels – A Pledge Breakdown

One question we get a lot is why our pledge prices are set the way that they are. We received this specific question on our last project quite a bit because of a $2 price increase we instituted. So we thought it might help to shed some light on the subject.

Shown in the following chart is the difference just $2 makes on profit margins of a custom Bicycle-branded deck followed by an explanation of each category.

pledge_combo

 

Production

This is the actual cost to produce the deck which includes our cost per deck from the manufacturer for a Bicycle branded product. This also includes the cost of a custom seal, additional fees that the manufacturer charges for layout, art fees for the actual cards, and shipping to our door.

Supplies

We’ve only included the costs of a small bubble mailer and the thermal label used to mail the package. Not included are the costs of printing paper and ink for invoices or the use of packing tape and other packing materials such as plastic bags. These may seem insignificant on a per item basis but they increase as volume goes up.

Shipping

This is for US shipping only and will warrant its own separate post in the future given the complexities and nuances of this particular category.  One thing to note here is that many have compared shipping costs for today’s current rate. We’ve been a bit more forward thinking given that our product will not ship until after January 27th, the day when the USPS will increase all of their domestic and international rates. To give you an idea, a 9 oz package that ships today at $2.65 will cost us $3.09 after the rate hike. This weight is enough for us to mail one deck, a coin, and 6 dice.

Fees

These are pretty self explanatory, Kickstarter and Amazon each take a percentage of the total pledge that can be as high as 10%.

Profit

The title of this category is a bit misleading, this is simply what is left over for us to use. This money goes to things like business expenses (utilities, hardware/software expenses, marketing, convention fees, travel, etc) that are necessary to continue running the company and building the brand.

Given an example of 1000 $9 pledges, that amount would be $270. Not a whole lot, especially when you consider that after expenses, my cut for working 360 hours doing just fulfillment comes from that. To put that in perspective, if that was my entire salary just for the time I spent doing fulfillment, my hourly wage would have been 75 cents an hour.

Now, at $11 a pledge, that’s looking a little better: $2310. This is much more in line with the costs incurred in doing business. Even if I received all of it, still only about $6/hour, but this will help pay the bills. And more importantly, it keeps us in business so that we can continue to keep making great products for you.

Summary

As you can see, nobody is getting rich off of this anytime soon and it certainly doesn’t have anything to do with greed. I firmly believe that our decks could sell at a $15 price point because of the quality of the product. However, I would like to keep the cost to our consumers down as much as possible to allow more people to have access to our products.

I’m a firm believer that if we take care of you, you’ll help take care of us.

 

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Size matters

I know you’ve heard that size doesn’t matter but the truth is that she’s lying. Here’s why you should care about size when looking at your package.

When we first considered Genegrafter we were going to use a very simple setup like the following. The deck of cards went into a nice little slot and dice would go into neat rows below it. The rulebook was originally going to be a glossy sheet that folded up and went on top of everything. (You can also see why I do not do the artwork for Albino Dragon)

box_original

At one point we spoke with a company about distributing Genegrafter (Albino Dragon games are currently only sold through Kickstarter and here on the site). They pointed out that in order to be noticed on the shelf at the game store you needed to be at least a certain size. We changed the box size and ended up at a massive 10″ – squared.

box_top

Guess what else went up? Costs.

Once we looked at this seemingly simple change, everything became more expensive. Now we needed more cardboard for the box, paper for the rulebook, it used more ink, and the inserts all got a lot bigger. And it wasn’t just materials, shipping became much more complicated. Before we could have put two copies of the game in a standard USPS priority box but now we couldn’t even fit one. Shipping costs went up on the boat from China too. Now instead of taking up 56 cubic inches of volume we were now consuming 400!

To give you an idea of what this means, games are packaged into larger boxes and then loaded up on pallets like this for transport:

pallet

Where before we could have fit 2000 games onto about 5 pallets, now we were looking at closer to 35. This not only increases the weight and volume used to calculate shipping costs, but also raises the inventory costs to store them once they reach the warehouse.

When I was explaining all of this to my girlfriend months ago I showed her a copy of Thunderstone (a game I like) and how most of the box is empty. Her response was, “Don’t people get mad or feel ripped off?” Surprisingly, I’ve never heard anyone say this. I would love to see an experiment that shows how the exact same contents but different size boxes can change the perception of value.

This is one of those perceptions in the industry that needs to change if consumers ever hope to bring down costs to make more affordable games. Our customers are smarter than that and there wasn’t any need to offer something bigger than what is absolutely necessary, so went back to a smaller box, resized our manual, and actually ADDED more components than we originally promised.

rulebook_cover

What are the benefits of going smaller?

* Less cardboard and paper used so a lower material cost
* Lighter and smaller volume for freight shipping
* Lighter and smaller for domestic shipping used in order fulfillment
* Easier to carry – frankly, I’m tired of having to pack up large boxes to take with me to game night
* Greener – fewer materials means less waste

So as you can see, size does matter.

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