Oct 292013
 

James Dawsey asked me to distill some of my comments from this Google+ conversation into a linkable blog post, so here goes!

International shipping for a Kickstarter is a problem from a bunch of different directions. The way I see it, you’ve basically got three options:

  • You can not offer international shipping, and get complaints about it;
  • You can offer it at a high but fairly honest cost and get complaints about it;
  • You can offer it at a cost that the international backers think is fair, but which pretty much eats up all the actual revenue value of their pledge, rendering their contribution effectively moot and potentially undermining your financial goals for the campaign.

These are not good choices, but they’re the choices.

Before you pop on down to the comments to tell me how I’m wrong here, let me say this: I’m happy to see options like facilities that can offer bulk international shipping start to open up for the international market. That said, such options open up a number of additional logistic hurdles which aren’t always worth the effort, especially if you’re a) going to be selling the game after the KS through distributors (or other internationally accessible channels) anyway, and b) your game is going to be distributed to the target market in question through one of those distributors.

Bottom line on that: When I’m running a KS, I have to budget both the money I’m getting and the impact on my time. So while some of the expense can be moved from the money column to the time column, that’s not always the best of exchange rates. :)

But what’s the deep core issue here, aside from, y’know, the fact that the United States postal system is underfunded and legally constrained from increasing domestic postage rates to the point where their costs would actually be covered, so they’re doing what they can by making regular-ish, big increases in their international shipping charges?

Comes down to the algebra of reward tiers.

With Kickstarter, because shipping gets wrapped up in the pledge, you have to watch your percentages. You could have a $25 tier that ships domestically, and a $50 tier that ships internationally, and that’s great — to an extent — if the international folks are willing to pay it.

But suppose that the $25 domestic tier represents $5 shipping + $20 contribution to the goal, and the $50 international tier represents $30 shipping + $20 contribution to the goal. When an international backer pledges that $50, they’re putting the project $50 closer to its funding mark… while only ACTUALLY contributing $20. Compare this to two domestic backers pledging $25 each and actually contributing $40 towards the goal. So in this example scenario the international backer’s pledge is only “worth” half a domestic pledge in terms of actual revenue contribution after shipping. This can be super problematic if the budgeting on the project, and its ultimate funding goal, is built around the scenario of a pledge that’s 80% meat, 20% shipping.

The two strategies (aside from “don’t offer international shipping”) for dealing with this are not all that satisfying.

First is “well, why not bill for shipping as a separate thing after the KS is over?” — And the answer to that seems to be a pretty consistent “because international backers don’t realize exactly how high a charge that will be, and the sticker shock will produce a lot of anger, especially amongst those who didn’t bother to read the pledge tier text closely”. That’s a huge emotional and cognitive load for a projectrunner to parse through when the shit starts hitting the fan, and it inevitably will.

Second is what we did with the Fate Dice kickstarter: if the budget’s ratio holds that 80% of a pledge should go towards the actual goal, with a max of 20% for shipping, then you should take the expected average cost of international shipping, and solve the equation for that. This is algebra in action! If X is the reward tier, and 20% of it needs to go towards shipping, and your international shipping charge is going to be about $30, then your equation to solve is .2x = $30. This tells us that the international shipping pledge tier needs to be $150: that way $30 goes towards shipping (20%) and $120 goes towards the actual non-shipping project costs. Voilla! Except, ohhh, the complaints you’ll get for only offering a $150 tier as your entry-point for an international backer.

At the end of the day project runners take the blame for factors beyond their control. They can’t control the fact that out-of-the-US shipping costs are spiraling out of control, and are highly unpredictable 6-12 months in advance, which is often the (minimum) hang time on many KSers; they can’t get KS to adopt a more sensible mode of splitting the shipping charges off from the project tally (at least not so far); and they can’t adopt an international-friendly shipping package that would ultimately bankrupt the project if it got popular. Congratulations! The math says every option is bad.

And so, that has me pursuing the least expensive, still disappointing, first option from that list up top. “Please order from an FLGS supplied by one of the following distributors” is fast becoming my go-to strategy for international stuff. Pair that with a cheap all-digital buy-in, and I don’t feel like I’m forcing the international folks to miss out on much. The only thing they’re potentially missing out on is a little bit of a speed-win for the delivery of the product, and that is something I’m comfortable asking them to take and like. If someone’s truly interested in being a supporter of what a Kickstarter campaign is about, and not just in it for the what-are-you-gonna-do-for-me of it, they can wait, and optionally, buy in for a buck to stay abreast of backer-only updates and developments. That’s lowest risk for everyone and doesn’t come with an implicit demand that the projectrunner choose insolvency in order to serve a few additional customers.

One possibly unnecessary footnote: There’s no judgment here. If you’re an international potential-backer, I’m not saying you have no value to me. I’m saying present circumstances are making it very hard to serve you and at some point I have to focus on the things I can do, cheaply, in bulk, and set aside anything that requires a lot more time, slow and close attention to detail, and so on. Business realities are what have put the squeeze on your role in a Kickstarter. Yes, these things could be worked around, at least marginally, but I think the best, strongest workarounds come through selling the results of a Kickstarter to you outside of the Kickstarter itself. As part of my acknowledgement of that, I avoid designing Kickstarters that have exclusive content — or if they do have it, they’re designed such that you can get at them digitally. I don’t get to choose my ideal results here, and I’m sad about it. But I also have to be smart about what I do and don’t do, for the health of my company.

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  • Dave Chalker

    Another way Evil Hat is above the curve on this: the bit of text at the beginning giving copy shops permission to print the books for personal use. So even if you choose to order digital-only, you still have an option to getting a print copy, even if it’s not as nice a little hardcover.

  • DetectiveClayton

    One hidden cost I’d not realised until I checked my bank statements – If I support a Kickstarter in $USD then my lovely bank charges me to convert that back to £GBP. And the more I back, the more those lovely people charge me! With the FATE dice I got to (a) support my FLGS by buying from them and (b) avoid giving my bank any extra cash.

    I think you’ve got the right approach by going through the usual distribution channels for the international stuff. It keeps you, them and the FLGS in business.

    Keep the kickstarters coming!

  • James Dawsey

    Thanks, Fred! I think people will get a lot out of this post. I know the conversation was very helpful to me.

  • sy matt

    what about send a bulk shipping to one international location and then they ship on from there. would that make it cheaper ?

    • fredhicks

      So basically, “What about what you talked about in paragraphs 5 and 6 above, Fred”? Well, I talked about it there. :)

  • mike lafferty

    RPGNOW POD shipping to Europe is comparable to shipping in the domestic US. Since the majority of my international KS pledges have been from Europe that seems to be a workable solution. Apparently their POD partner has a facility in the UK.

    If we’re talking Australia, South American or Asia – it’s much, much higher.

    • bluetyson

      But not too bad…Like $10 or so to ship from Australia, because they can ship from the UK not the USA where it would cost several times as much.

      And there is Lulu here, shipping is about $8 for one book and only another dollar or so for each extra one….hardbacks cost somewhat more. Nothing remotely like the $45 I saw on a recent Kickstarter though, more like $15 I think.

      The actual book then is presumably different to the ones produced by fancy printers for bigger kickstarters….but not for small ones.

      It is a different fulfillment step, but one that avoids filling out boring international shipping paperwork.

    • mike lafferty

      double checked on RPGNOW – and yes – you’re correct, bluetyson. My mistake.
      Australia shipping was 5$ or 7$ more expensive than US or UK – which is not terrible. Certainly not jaw-dropping (like Asia and South America were.)

    • fredhicks

      Print on demand (where the books are actually printed on demand for recipients in their native market, which RPGNOW-via-Lightning Source and Lulu at least attempt to do) certainly works so long as a print on demand scenario works for your product at all, and you’re good with the typically much smaller margins offered by that method. If that’s not your sole route to print, it’s added setup work; and again, if you find that that particular time/money exchange rate works out in a way you’re comfortable with, great.

    • mike lafferty

      Agreed that POD is certainly not an ideal option for everyone. It has its drawbacks – smaller margins being one.
      It does have advantages for a small/hobbyist publisher that’s trying to avoid the expense of a large print run and some of the associated risks while still providing a print product.

    • fredhicks

      Yes!

  • John Buckmaster

    My big issue, and it’s not really anything KS makers can fix, is WHY are shipping costs to Canada so high? I can ship from the UK to Canada for less than half of what it costs to get the same item shipped from the US to Canada. Once you Factor in VAT discount, it ends up being closer to a quarter of the cost for shipping. And it will be faster with less customs holdups.

    It’s not just limited to the UK, though. I can ship EMS or even FedEx from Japan for the same cost as shipping expedited post from the US. Slightly higher customs fees, but it’s here faster. When shipping across an ocean is less expensive and faster than shipping from less than a day’s drive from where I live, we have a problem. USPS is not making sense.

    If you are a company and already have a deal with a reputable courier (avoid UPS, they’re horrible at overcharging brokerage fees), it’s possible to ship cheaper. But that’s not feasible for many Kickstarters, either because they’re a startup or because they’re a small company without the volume.

    I wish there was something we can do, but there’s not much we can. I’m not backing as many projects as I used to due to the extra shipping cost insanity. The ones I do back are often established companies that can offer less expensive shipping…which isn’t fair for the startups. The big advantage of having this gigantic audience is severely curtailed, turning kickstarters into local events, rather than global.

    • Angus A

      I know it’s insane. I handle mail order and Kickstarter fulfilment for a few companies now covering their non-US backers and it’s cheaper to freight the books over to me in the US, for me to break down to individual orders and then send over to Canada than it is to just post them from the States to Canada.
      Angus

    • airfy

      Hey Angus, drop me a mail to hello@airfy.com for more information regarding your services.

    • Peter

      Likewise, would like to hear about your services at thewriters@gmail.com

  • Gustavo Campanelli

    Great article, and I agree that in Fate Core the cheap digital tier made a lot of sense to me just because of this seen from the other side. I don’t have to wait extra time for the goods to arrive, pass customs and get home. I don’t have to worry about it being “misplaced” or damaged by bad handling.

    This should be a required post linked in every new kickstarter.

  • JWN

    A couple of thoughts on that:
    It seems that the logical place to solve this dilemma is for Kickstarter to count shipping separate from funding goal. But I guess that opens up some possibilities for controversies they’d rather not invite. Still, it seems like the best option overall.

    Another option could be to strike some deal with local shops, and send the kickstarter rewards for pickup there as part of a normal bulk shipment. Obviously, that negates any “early bird” privilege, but that’s really not what I back a kickstarter for in the first place, so that would work fine for me.

    And finally, I am not sure how bad it would actually go down to only offer international shipping to high-level pledges. I think many of us Europeans are already used to buying in bulk to amortize shipping cost when dealing overseas, and we probably do that calculation anyway when having to pay for shipping as part of the backing. You’re probably speaking from experience when you talk about the complaints over that, but I guess what you’re seeing there is a very vocal minority. –Whether that can taint the whole mood so it’s not worth it is then another matter.

    You’ve probably already worked these ideas over considerably more thoroughly than me, so any comments on the issues with these?

    • fredhicks

      Like I said, we’ve tried the “high level only” approach with our Fate Dice kickstarter. It got complaints, and still carried at least a few international delivery issues for those who did back. (I have one customer in Iceland who was charged so much locally for the privilege of receiving the package that they chose not to receive the second shipment at all.) From a customer service standpoint, receiving an internationally shipped package is not necessarily the greatest of moments: it arrives beaten up and often as not with a number of additional customs hassles and charges. Not the kind of end-of-the-relationship note I want to leave a backer on. So there’s that.

      Local shops require lots of vetting, coordination, and other difficulties, as I also said in the post.

      I’d love for Kickstarter to count the shipping separately — it would certainly go a long ways towards addressing the biggest problems. But I’m not at all convinced it would, by itself, solve the growing problem of international shipping.

    • JWN

      VAT, import fee, duty tax; I’ve been there from the backer side. -Actually, I have deliberately ducked just under the duty threshold, precisely because I ran the numbers.
      I’m getting the sense that despite all efforts to inform people, there are just too many who are blindsided by it.

      As for the repeated questions about shipping partners, I read the original post as talking about the work in setting up a new network of distribution centers (“facilities that can offer bulk international shipping start to open”), and was wondering if existing connections could be used at the cost of not shipping directly to the individual backers. But from your later answers, I take it that it was meant as a more blanket “involving extra partners is just too much work”. I was honestly not trying to be obstinate :-)

      Did the complaints about the “high level only” translate into fewer international backers compared to your other projects, or simply in wearing you out?

      And yes, I realize I am wearing you out with all the questions, but I am jumping at the opportunity to get some good information from somebody who has tried several things and is willing to talk about it. It is *much* appreciated.

    • fredhicks

      There were fewer international backers on the high-level-only kickstarter I ran (Fate Dice), but you’d sort of expect that domestically too if all you offered were tiers with a high cost of buy-in, so that’s not much of a revelation, I think. :)

      There’s also a lot of work and a lot of back-end customer service load involved in putting another middle-man shipper into play. If they delay, if they screw up a package, it’s *your* customer service issue to reconcile, your imprint on the product. And if those middle-men aren’t tried, tested, and positively testimonialized, it can feel like a real gamble to try to go with such an operation.

    • JWN

      My line of thinking was that overseas backers would tend to back high anyway to get the most “bang for their shipping bucks”, so you’d lose comparatively fewer overseas backers than domestic backers when having high starting tiers.
      But I don’t know if that’s actually true, or, if it is, to a level where it makes any significant statistical difference. In any case, it would probably be difficult to see amongst all the other variables, and of course, once digital reward levels are included, it completely changes the dynamics again.

    • fredhicks

      I think that operates under the same economics as any high-cost pledge tier does. Most people can’t afford to, or can but they want to spread their gaming dollar around more evenly so shouldn’t.

  • Z

    I came here from the Reaper Bones II Kickstarter. You are right. There seems to be a HUGE backlash against the people who have absolutely ZERO control over shipping charges to outside the US. Especially in comparison to how things were done “before”. And the “unfairness” of local (US) customers getting cheaper (free) shipping.

    Reaper did one better and put together a (very complicated I am sure) Pledge Manager that would also calculate (approximate) shipping charges (based on 2013 prices, not the new and improved and increased 2014 prices) so that people would know how much it was actually going to cost them. I thought that was brilliant. Others kinda disagreed.

    I do strongly support the idea that Kickstarter needs to separate out the shipping charges from the capital. If Bones I had been any more successful, there’s a big possibility that the shipping charges would’ve caused Reaper to go too far into the red.

    I am fortunate to live in Canada very close to the US border and there are a number of businesses just across the way that provide parcel pick-up services. Get things shipped to a US address, pick them up for a nominal fee (with an email reminder of when the parcel arrives), and usually don’t have to pay customs or duty on the smaller packages. It’s a pretty big win for me when there are some things were shipping is well over half (or even 100%) of the item’s cost!

  • Fedifensor

    I live in the US, but if I was overseas, I wouldn’t pay for international shipping. Instead, my money would go to other things:
    1) Tablet computer – something with the form factor of an iPad isn’t as good as a physical book, but is perfectly serviceable for PDFs. Plus, I’ve stopped buying RPGs that don’t have an electronic version available, as I want to be able to take my gaming library without packing an extra suitcase.
    2) Copy shops – Find a good copy shop to print out that PDF you just bought, and the difference between that and purchasing the book directly is minimal. Of course, I’ve always been more interested in function than appearance.
    3) Plane tickets – If I have to shell out hundreds of dollars to ship physical products from overseas, why not just save up the money, take a trip overseas, and buy the products directly from the source. As long as you can set aside enough luggage space for the items, you pay for a vacation with the money saved on shipping. Bonus points if you have a friend in the states that can receive shipments and hold them until you can make the trip.

  • Shanna Germain

    This is really a great insight into how difficult a process this is. We’re trying something totally new with The Strange Kickstarter — giving backers a credit toward shipping and then allowing them to choose their shipping format at a later date. For international shippers, this will always cost something beyond the shipping credit we offer, but they get to choose how much. So far, backers seem to like the autonomy it offers. It’s still early in the process, but we’re hopeful that we’ve found a good solution.

    • fredhicks

      Fingers crossed. I think that is still likely to produce some sticker shock for the international recipients, as I talked about in the post, but hope for you guys it’s not too much. :)

    • Shanna Germain

      We’ll take all the finger crossing we can get! Maybe by next year when we’re shipping, there will be affordable international shipping and cell phone service…. Hahahaha… :)

    • bluetyson

      Yes, on this one it is making me wait….as it is possible that the postage by that time will be more than the books…and they are $40 books.

      So it might be cheaper to get them for the $70-80-90 etc. they will be in shops eventually.

      So a definite risk.

  • DeniablePlausability

    You should account for shipping costs to all customers in your funding goal.

    • fredhicks

      No kidding!

      Quick — I’m about to plan a kickstarter, which could have between 1 and 10,000 backers. Anywhere between 0% and 100% of them could be international.

      Please tell me exactly how many international backers I’m going to get so I can do the accounting-for you’re insisting I should be able to do prior to launch.

    • DeniablePlausability

      How do you account for how many copies you’re going to print? Take that number and apply the international shipping rate to every copy. Yes you’ll have extra funds at the end. Bonus! If you’re uncomfortable with that, apply an appropriate discount to the per item ship cost.

    • fredhicks

      … wow. Okay, it’s pretty clear you’ve never run a Kickstarter, and/or haven’t done the math on your suggestion.

      Let’s look at Fate Core, since it’s pretty undeniable that the demand (10,000 backers) was at the top end of what any RPG kickstarters have pulled in in terms of audience. At least 6000 of those were oriented on getting a physical book.

      At the time that I launched the kickstarter — the last point at which I’d be able to set goals, since they lock in at launch — I’d expected to do a print run of maybe 2000-4000 books at most. So I’d be wrong with that data alone. Let’s assume I’m psychic, tho, and I know in advance that 6000 folks are gonna want a physical copy of Fate Core, a $20 hardcover book.

      6000 books multiplied by your suggested assumption of an international shipping charge on every book… I have to expect the worst case shipping scenario, but I know this book will come in under 4 pounds, so I can probably look at Australia to benchmark that. Add in handling and we’re probably looking at a $30 international shipping charge. 6000 multiplied by $30 = $180,000 for the assumed shipping costs alone. On top of that, maybe I should add in the less significant costs… like the print run, paying anyone who worked on the book, etc. We’d be well over $200,000 by that point.

      How many RPG kickstarters do you think could do that? While we did make it over $400k, that was by kicking off a product line of over half a dozen physical books out of that total.

      Bottom line: you’re kinda smugly suggesting stuff that does not work. Please stop.

    • Stephen Coffey

      Calculate for your minimum number, not for your actual future number.

      The minimum value at which you’ll break even if everyone is an international backer.

      It’s not always doable, but it’s the way to go about it. You wouldn’t have set the goal at $200,000, because 6000 international backers isn’t your break even point.

      I get where you’re coming from, but I *did* run the numbers assuming all Australian backers before starting my kickstarter. If you’re only offering one product it’s actually a quite simple equation. It’s when you start adding in *more* options that it gets complicated.

      So, the stretch goals increasing the number of physical books, that’s what makes the maths infeasibly complex.

    • fredhicks

      Oh, sure. If your circumstances are very simple with no interesting combination factors or effort to grow a product offering into a product line offering then that math is doable.

      I mean… that describes zero out of the four Kickstarters I’ve run, I think (Race to Adventure might be an edge case there), but you’re right that that method can be done.

      I don’t think it’ll consistently produce an achievable scenario, though, and once the math tells you you “need” to set your goal too high to account for 100% international backer buy-in, it’s time to consider whether or not you should allow international backer buy-in in the first place. And so, full circle back to my analysis. :)

  • tquid

    Let’s underline what you said about the USPS: a decades-long campaign to destroy the USPS as an effective quasi-governmental infrastructure service is also destroying international markets for small business. Full stop.

    • fredhicks

      Yup.

  • Drew Pefferle

    you are correct. I am working on a new project and have to send small boxes to my developers in the Ukraine and manufactures in China. It costs me between 300-450 US to send these. This is normal shipping not over night,. Doesn’t take to many of those to eat up all your income.

  • Kristy gd

    I found thisarticle through a link, but I also follow you through Google+. I just wanted to say that I always find your posts informative and well articulated. I appreciate that you take the time to discuss these types of issues with your fans and the community at large. Thank you.

  • http://sandandsteam.net/ Tracy Barnett

    It’s a whole bunch of not-fun, that’s for sure. I’m looking at one possible solution for my upcoming KSer in January for the Iron Edda RPG.

    Since I’m going through DTRPG for my printing, I have the option to offer people a coupon to get the book printed at-cost. That means I can offer a $20 or $25 tier aimed primarily at Int’l backers where they get the PDF, all the digital stretch goals, and a coupon to print the book at-cost. Since DTRPG has a printing facility in the UK, the backers save on their shipping and probably get the book much faster than if I shipped it.

    For domestic backers, I’d offer a $30 or $35 tier where I handle the ordering and shipping for them. It’s a convenience thing. The margins are roughly the same for me in either scenario.

    As well, if a domestic backer wants to buy the tier with the coupon, more power to them. Works just as well for domestic stuff. Most probably won’t go for it because of the convenience of having me handle it.

    The only problem this doesn’t solve for me is how to handle print copies of the stretch goals. But that’s where a service like BackerKit comes in.

    • Ian Kirby

      I like this approach for the small publisher. I have a couple of DriveThruRPG prints and they’ve been very good quality. As someone from the UK, I’ve started backing the US Kickstarters purely at the PDF level and then buying the book from a retailer here once they get released. Works well.

  • Jennifer Fuss

    Wouldn’t it be possible to partner up with a re-shipper to solve the issue?

    At the one hand I really don’t like digital only rewards and usually don’t back projects for those.
    At the other hand more often then not there are Kickstarter exclusive extra which people simply won’t get from their FLGS.

    If and it might be a rather big IF they even got a FLGS around. I got to drive like about 20 to 40 miles to get to the next FLGS who might even not be monitoring Kickstarter or be likely to get the newest stuff around,..

    • fredhicks

      These paragraphs from the post are me talking about this suggestion (as well as several other variations on this suggestion that I’ve gotten today). Repeating them here because I’m not sure folks are actually reading them…

      “I’m happy to see options like facilities that can offer bulk international shipping start to open up for the international market. That said, such options open up a number of additional logistic hurdles which aren’t always worth the effort, especially if you’re a) going to be selling the game after the KS through distributors (or other internationally accessible channels) anyway, and b) your game is going to be distributed to the target market in question through one of those distributors.

      Bottom line on that: When I’m running a KS, I have to budget both the money I’m getting and the impact on my time. So while some of the expense can be moved from the money column to the time column, that’s not always the best of exchange rates.”

    • http://ehalseymiles.com E. Halsey Miles

      I think people are reading them, but your explanation doesn’t really say much about what the additional hurdles are, so people are having trouble imagining what the issues are. You’ve got a nice if on what will trigger the hurdles though, but there’s no sense of what extra time or expense this is going to take from you, and so people read right past it. I think.

  • fredhicks

    Aha! You’re talking about what is essentially a backer-side solution: if a backer provides a USA-based address (from whence a person they’re paying will ship them what arrives), they’re effectively a domestic backer at that point, at least as far as the projectrunner goes. So that sort of concept is out of scope for what I’m talking about.

    If those sorts of services DO exist, and are reliable, and make the international folks happy, I sure hope they’ll make use of them.

  • CC

    Lemme know if you have a rebuttal to Stonemaier Games. Thanks for the article!
    http://boardgamegeek.com/article/13831579#13831579

  • http://mechanteanemone.wordpress.com/ Sophie Lagace

    It’s been clear that shipping (even domestic) is a hurdle for a lot of crowd-funded projects. I’d like to throw in some ideas for options, perhaps more for the backers than for the people asking for funding. It seems to me what crowd-funding entails is relying on an existing, enthusiastic fan base to get up-front money for a project by offering some value that will not typically be available by waiting until a project is released. So I would be looking for things that can be offered within the regs of the crowd-funding platform but decrease or eliminate shipping costs. I realise that each of those ideas comes with its own challenges and potential nightmares, I’m just trying to see if there are valid but unexplored option.

    - Encouraging group purchases among backers (on the assumption that shipping one package with ten books is cheaper than ten packages with one book each?).

    - Matching would-be backers with FLGS in their area to help with bundling.

    - Offering a coupon for future purchase at a FLGS along with rewards only available to international backers, such as buttons, badges, magnets, stickers, bonus PDF material, NPC named for you, or other “I supported my team!” acknowledgements that are much cheaper and easier to ship than books.

    - Offering a “ship at real cost” backer option alongside the “pick up at your FLGS” option, allowing backers to decide early on.

  • T. Rob Brown

    I wouldn’t say “The United States Postal Service is underfunded”… in fact, it’s the ONLY profitable part of the US government and its funds come from the sales and services. Perhaps what you mean is that they’re not allowed to make major profits so they aren’t allowed to raise their rates a lot higher. Since FedEx, UPS, and other independent shipping companies must compete with USPS, their prices have to be kept fairly close or in line.

    • fredhicks

      I assume this financial stability is why, as the post office headed into 2012, they were talking about needing to be saved, about bankruptcy, that sort of thing, yeah? http://money.cnn.com/2011/11/21/news/economy/postal_service/

      I mean, if you want to know where my notions of that came from — it was very much that message, put out by the Postmaster General, in recent years’ memory.

    • Mountainhawk

      The financial “problems” of the USPS are due to a single law that requires them to prefund their health and pension benefits SEVENTY FIVE years in advance. That’s right, they are funding pensions for employees that aren’t even born yet.
      The costs of running the actual USPS are covered by the postage, it’s just the insane pre-funding requirement that isn’t. It was passed something like a decade ago, and the USPS has been scrambling ever since.

    • fredhicks

      Doesn’t make it not a problem; doesn’t make it not a causal factor.

  • Guest

    The big issue I see for over seas backers is the stretch goals. A tier that allowed them to get the goals to go with their game would be nice.

    • fredhicks

      This assumes stretch goals are exclusives, right? In our case they’re not. We stretch to create new products, which we supply to distribution afterwards. Hence Fate System Toolkit, Fate Worlds (both volumes), and more.

  • Georg Mir

    I think this is a thorough analysis of the situation. I also missed out on the FATE dice, because 150$ was too high for me to get it; although I could have organized (but I don’t know a lot of peeps in my region who might need FATE dice).

    I wouldn’t want you to miss out on earnings. I’m usually totally okay with paying an increased price for international shipping, but you pointed out the actual problem here. Maybe Kickstarter needs an option (for you) to set up shipping costs for each tier. So those shipping costs aren’t taken into account on the actual backing.

    That would help you offer your international reward tiers with the amount you’d need for shipping, without getting in the way of your earnings.

    Can’t we pledge something like that to the KS folks, or is that out of the question, because it would open up the flood gates for those who’d abuse it? (Or is that actually no problem anyway?)

    • fredhicks

      I agree that the most effective way to address this would be if Kickstarter allowed for a “non-contributory portion”, clearly expressed to the backer, on each reward tier, and to include any international shipping charge as a part of that non-contributory portion. That’d make it much more viable for us, enough so that I could probably work around any remaining issues. But without it, with the “bad experience/sticker shock” effect for strategies that bill shipping after the fact, and with the time-intensive investment needed for a distributed shipping plan, I’m kinda stuck for workable alternatives for how I need to run the business—aside from simply supporting the option for international customers to buy whatever was on offer after the KS campaign is over.

    • Georg Mir

      I know I’m pretty late to the reply. I haven’t seen it until now.

      Maybe you could offer a tier that is all digital but with added benefits, so you get a single discount code usable for POD or after-kickstarter-orders.

      People would pick that tier; earn access to rewards, and pay less for physical products afterwards (because they already contributed on the KS).

      It’s something I’d be looking for a lot in KS… I don’t like paying double for products I have already paid for. On my own publisher activities, I always state clearly that people should mail me in case they want to pick up the hardcover after buying the PDF (because they then receive a -10$ discount).

      I hope that doesn’t sound too complicated. German speaker and such, you know. :)

  • Stormy01

    Hmm, the maths is right. I really never considered this aspect of it. I would like to say that as an international backer I am actually happier to provide a backer-side solution: using a freight forwarding service. It’s usually much cheaper than what project owners can offer me. But so far, I’ve not been able to do so with any of my backed projects because of the following 2 problems:

    1) I need the packaging dimensions and the weight of the physical product in order to estimate my shipping charges. Kickstarters still in the conceptual stage can’t give those to me and I understand that. This limits me to Kickstarters where the product is actually already completed and are only asking for funds to start production. Else, I’ll just have to back and pray you won’t end up shipping a behemoth out to me…

    2) Freight forwarding services usually don’t repackage shipments. Packages are grouped and sent out in containers. My puny little hardback comic book could be banging about with a cast iron cauldron for all i know :( As such I would really like the assurance from the project owners that either their goods will be shipped out in a sturdy, cushioned box (and not something flimsy like a envelope with newspaper stuffed inside) or they are willing to make an exchange if goods are severely damaged in transit (non-ideal for both you and me; I don’t want to go through the hassle and you don’t want to make the loss). However I’m afraid not all, but most project owners can’t/won’t give me a straight answer when I ask how they intend to package their items for shipping. I’m not sure, but is that really difficult to do so?

    If the Project Owner is able to give information on the above 2 items, I would be happy to take the problem of International shipping off his hands and make my contribution count fully towards his goal.

    Btw Borelinx and ComGateway are 2 of the better known freight forwarding services. Project owners could point intl backers to the sites of these 2 services and gently remind them to check their local customs/duties laws to figure out if they need pay any additional taxes on top of shipping. While I am really appreciative of those projects that takes good care of us international backers, I empathise with those that choose not to. If I really want what you’re selling, no worries I can figure out a way to get my sticky hands on them.

  • Louis L

    Very interesting article and thoughts on this issue. Having been an international (Canadian) backer on a couple Kickstarters, I’ve seen how crazy shipping costs can get. I agree, I think having Kickstarter split the costs of shipping and the goal would be the best way to handle this problem. Maybe that will never happen, but we can hope.

    On the other hand, I offer another approach for commentary. Charge domestic backers more for the product. Obviously this doesn’t give the best deal to your US backers and it might sound crazy, but in a way, if shipping costs are cutting into the profitability of the Kickstarter, then domestic backers are effectively subsidizing the goal portion for international backers anyway.

    So from your 80/20 example above, make the numbers so that your domestic backers are in the range of 90% towards goal, and 10% goes towards paying their own shipping. That way you should be able to lower the threshold for international backers and make the project more accessible.

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  • Hollis McCray

    As Fred Hicks says, there is no ‘best’ way to handle shipping for international kickstarter backers. Monte Cook Games is trying something I haven’t seen before with their kickstarter for The Strange. Each physical reward includes a credit towards shipping that backers can apply toward the shipping method of their choice when physical rewards ship. It’s not a perfect solution, but it’s worth seeing how well it works out for them.

  • Charlie Liang

    International shipping doesn’t have to be hard. Shipwire has taken the stress out of shipping for dozens of Kickstarter brands.

    http://info.shipwire.com/kickstarter-rewards-fulfillment.html

    *I work for Shipwire

  • NinjaWeasel

    I keep seeing $40 being mentioned as the figure for International shipping. How is this figure calculated? Does it not vary depending upon weight? I can’t recall seeing anything explaining the figure but several different Kickstarters have quoted it.

    I’ve had some large hardback books shipped to the UK from Amazon US for $15-20. Now I know that Amazon are a very big company and are proabably able to absorb some of the shipping costs but I have also had several purchases from Noble Knight Games in the last few months and, despite the heavy weights involved, they haven’t cost me much more than $27 at the most. I don’t know who Amazon use for shipping but the stuff from Noble Knight went via USPS.

    I’d like to continue supporting Kickstarters and I may start using a service like BundleBox instead of getting them shipped direct to the UK. However, I need to give that a little more investigation. $40 isn’t prohibitively expensive to me but it’s not so great and the suggestion that shipping will increase again soon is disheartening to say the least.

    • fredhicks

      If your package contents will reliably come in several ounces under 4 pounds (you need the extra to account for the weight of packing materials and other variances), you have a shot at getting first class international shipping, which runs from the low $20s to the high $20s. You cross that 4 pound mark, and you’re not allowed to ship first class any more: it has to go International Priority Mail, which is the one that starts hovering around the $40 mark (plus or minus some depending on the destination: Canada’s a low end, Australia’s a high end).

      It’s never wise to compare to Amazon. Amazon has Amazon’s whole multi-milliion-dollar logistics organization behind it. Amazon does things in sufficient bulk that they could gather up all the stuff that’s due to be shipped from the US to the UK in one big fat shipment, pay a much lower bulk freight rate on *that*, then distribute using cheaper local means once that stuff all gets across the ocean.

    • NinjaWeasel

      Thanks for the explanation Fred! The cost of getting things shipped from the US has become extremely difficult to work out in the last 12 months. What I get charged doesn’t always seem to add up so it’s nice to get a bit more insight into how things are being worked out.

  • Ryan Royce

    Something occurred to me today on the ride home from work… what if International Shipping was itself a stretch goal? Meaning that only domestic shipping would be offered until that stretch goal was met, after which new tiers would be created to let international backers get physical stuff. The idea being that international backers who want your product badly enough would help *voluntarily* subsidize the international shipping costs of those who aren’t so well-off. Could that be a solution?

    • fredhicks

      I’d need to see the actual math behind that idea. :)

    • Ryan Royce

      The exact math would depend on the specific budget and project, but the main benefit would be preserving the 80:20 budget ratio for the primary goal itself. Determining the dollar amount to peg to the Int’l Shipping stretch goal would be the hard part (obviously) but fortunately, as a stretch goal, it wouldn’t have to be set until after you (or whoever) had some real data to base that projection on.

      Alternatively, based on the numbers you provided in the article, you could set all stretch goals to a 40:60 goal-to-shipping budget ratio and offer International Shipping as a support tier with limited availability. As in, for every $50 in excess of the primary goal, $20 would go to actually funding stretch goals and one international shipping slot would open up.

      This doesn’t solve the issue of having shipping costs rise precipitously in the months following the end of the Kickstarter, but until “shipping” is a commodity you can buy on the futures market, there’s not much that can be done about it.

    • Ryan Royce

      Also, if the Kickstarter ends without using up all available international shipping slots, then any funds devoted to the “leftover” slots could be folded back into the goal side of the ratio and possibly hitting another regular stretch goal.

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  • Alfredo Tarancón

    Great article. I arrive a little late to the party, but it’s great to see this kind of information. I’ve made a couple of crowdfunding projects, but in verkami, an spanish site, and lot less scope, but I’ planning on doing something more international oriented, so all is really useful.

    I see an option here, an oportunity to create a new business related to this problem. It could be interesting to create a website that coordinated people from the same areas to make bulk international orders in Kickstarter. Somebody made something like that when Vampire 20th anniversary was released, but on a costumer level. It could very well work as a startup.

    Projects could create special tier rewardas fot this kind of order, and the other site could arrange the payment of that tier, charging the members of the area group once the original project got funded. As somekind of second-wave crowdfunding… Not sure if i’m explaining properly…

  • Pete

    What about using logistic hubs? Sending in bulk by sea / land and distributing continentally already cheaper?

    • fredhicks

      That requires fairly massive buy in from each international market in question. Even when we’ve opened up things fully and easily to the international market we haven’t seen purchases in quantities that’d make it worth the significant added time and attention needed to run a more logistically complicated scenario like you’re describing.