The Dresden Files Cooperative Card Game (DFCO) kickstarter is coming in just a few weeks, and I’ve got shipping on my mind, as I always do when another Kickstarter campaign is rolling around. (DFCO’s KS will be the ninth I’ve run.)
One of the shipping models we’ve tried for our prior Kickstarters is to charge no shipping during the Kickstarter campaign, but then bill for it later via BackerKit. (I love BackerKit, particularly because we have a deep enough catalog that we can do pretty well with our add-on sales after the campaign.)
It’s gonna make sense to do that again, here. International shipping is just straight-up gross right now, and bound to get worse over time. (And our game won’t ship until next year in all likelihood… who knows what new horrible rate hikes will occur between now and then?)
We’re looking at a potentially 3-point-something pound package here for the base game, which is functionally identical to an exactly 4-pound package as far as most international shipping rates are concerned. And the US Post Office estimates around $50 to ship a 4-pound package to most places outside of the USA. Fifty! (That’s not an April Fool’s joke. Gods, how I wish it was.) That’s about five times what we want to charge our domestic backers for shipping, and costs more than the game itself ($39.99).
When it comes down to it, time and again, much as I would like to launch our KSes without international options, it’s clear that even with horrifying, face-melting shipping costs, folks outside of the USA still want us to offer the option. It’s never smart to ignore our fans and customers. So that leaves us with the need to figure out how to offer it without sinking our project in the process — effectively hiding failure inside the appearance of success.
(In addition, this far ahead of manufacture, it’s difficult to get a clear read on the product weight. They’d need to make it first, and in order to make it we have to have a funded Kickstarter, so… yeah. What if it turns out to be less than 3 pounds, instead of more than 3? That could be a significant cost break for internationals. Variables, we gots them.)
So, time for some math. Let’s say that to fund a game at about $40,000 (accommodating costs of manufacture, royalties to game designer and licensor, and Kickstarter + payment processing cuts), and the game I’m selling is $40. I’m gonna charge $10 for domestic shipping of that game. (I’m choosing a nice round numbers here to keep the math easy.)
If I could rely on purely domestic backers, I’d add $10,000 to that funding goal. ($10 per shipment x 1000 backers @ $40 each to make that $40k actual needed funds target.)
But if I open things up to international backers, I can’t rely on math so simple and stable. The absolute worst case scenario would be 100% international backing, which is super ludicrously unlikely, but imagine that scenario, imagine that I couldn’t get a rate better than $50 per package, and I charged shipping during the KS. Each International backer would contribute $90, but only $40 of that would actually be covering my intended costs. We’d hit $50k with just 555 backers, but over $27k of that would be shipping costs, and I’d have less than $23k of the $40k I actually need.
More realistically, I’d say that when we do open things up to international backers, we can run as high as 20% in international backers for a campaign. Sometimes it’s a lot smaller, sometimes not. But I’m mostly comfortable using 20% as the ballpark when constructing estimates.
So let’s 80/20 that. If 80% of my backers are domestic, and 20% of them are international, and each is paying $40 for the product plus whatever for the shipping, then I’m looking at 800 domestics, 200 internationals to get the $40k, but I’ll need to set the target at (800 x $10 + 200 x $50 equals) $18k higher to accommodate that scenario. If I’m lucky, by the time we reach a $58k goal, I have only 200 international shipments to worry about. If I’m not, then my 20% estimate was low, and every international backer past that takes money away from the actual project.
(In reality, it’d be more than an $18k boost, because that $18k is also subject to payment processing, Kickstarter fees, etc, so I’d need to pad it out a bit to make sure I’m getting the actual $18k needed for the shipping portion of the bill.)
This all gets a lot cleaner if I can set aside shipping costs for now, and bill them later when my variables are clearer. I’ll also be able to offer my backers the benefit of a few months more of efforts to get those shipping costs lower. (For example, I’ve found a solution for getting DFCO into Canada at just $25 per shipment. Maybe I’ll be able to find some other good methods for getting the games to other locations abroad. That said, please don’t drown me in suggestions here. I’ve heard them before!)
If I don’t have to worry about shipping costs at all my Kickstarter math starts clean and stays clean: $40k goal, $40 buy-in, we’ll bill you an appropriate shipping amount later, hopefully at a rate lower than what we’re currently getting quoted, and international backers won’t distort our funding simply by dint of participating.
On paper it looks pretty good. Reality, as usual, has other ideas. While this is a pretty solid approach for me overall, it does have its pitfalls.
First off is there’s nothing stopping backers from pre-committing the shipping cash as part of their pledge. The problem is, if they do this, while it has the appearance of pushing the project closer to its various funding goals, what it’s actually doing is “hiding failure in success” — if you pledge $80 because you figure you’ll have a $40 shipping bill later, all $80 of that goes towards the funding goal, and it won’t really emerge that what you actually did was move the needle $80 closer to the goal, while only providing $40 of actual funding to the project itself (as opposed to the shipping operation). To head this off for the DFCO KS, I’m going to be explicitly asking people not to engage in this behavior. (If you think this behavior is unlikely, think again; I saw exactly this behavior in prior KS that used the deferred shipping model.) Hopefully they’ll listen and comply, because it really does undermine the entire point of deferring shipping costs to later.
Secondly, there’s a simple reality that many people don’t read closely enough, and this leads to surprise, outrage, and general sticker shock when the deferred shipping charge comes due. Again, this is based in experience. There’s not much I can do about it except communicate the message in as many places as possible, as often as possible, so people keep it in mind, and so when the shipping bill comes due months later they aren’t suddenly infuriated for things going exactly as I said they would. That’s a hell of a hang-time effect, though, and while it didn’t happen a lot the prior times I did this method, it happened enough that I felt a little sour about having used the model. That sour feeling has faded, though, and the rationale for bill-it-later shipping has remained strong, so this simply goes on the list of hurdles I need to make sure we clear.
Bottom line, bill-it-later shipping continues to make sense for us, and with a potentially big project like DFCO we need to use our best-of-breed strategies to make it all work. And hopefully, if we continue to use this model, the potential for sticker shock and undermining backer behaviors will fade due to it becoming a more familiar feature of our campaigns.
Fingers crossed! And stay tuned for the impending Kickstarter campaign. We have some fun reveals in store for the time leading up to the launch, too. Hope to see you there.