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Crowdfunding Best Practices

Guide to Shipping for Crowdfunding

In Chapter 5, the Easyship experts cover how to set up a shipping strategy, including budgeting, packaging and the pros & cons of a 3PL.
Guide to Shipping for Crowdfunding
Jules

By Jules

 

December 29, 2020

It’s time to ship! After-all, getting your product in the hands of your passionate backers is the entire reason for going on this journey. As with every other aspect of your campaign, successful shipping comes down to planning and preparation. It’s not something you want to leave to the last minute as there can be significant consequences if things go wrong, primarily, that your product doesn’t reach your backers on time. That can cause a customer service nightmare which now crowdfunder wants to deal with. Never fear, with our guide you’ll be able to master shipping without a hitch.

Setting up a Budget

Easyship Crowdfunding calculator

Shipping may not be the most glamorous part of the crowdfunding process but it’s critically important. If left on the backburner, it can become one of your biggest woes, eating into your cash reserves. It doesn’t have to be that way, though. Setting a budget — and sticking to it makes a big difference. Creating a shipping plan rather than sending orders ad hoc can cut spending so that shipping costs only account for about 10-15% of your funds raised, 20% max, according to our best calculations here at Easyship.

Makers who have done their research will know to set a budget and create a plan for shipping before their campaign goes live. After all, no one wants to scramble to get items out the door at the last minute, Not to mention that calculating fulfillment, shipping, duties, and taxes before you launch can be the difference between turning a profit or being deep in the red. Below, we’ll explore a few budgetary factors you ought to consider before launching your campaign.

Where Are You Shipping

Know your target market — that will determine where you’re shipping. Keep in mind that 38% of backers are likely outside the US. If you’re shipping internationally, keep in mind that some countries are easier — and cheaper — to ship to than others. Some countries require strict documentation to make it through customs.

For example, in Russia customs has more authority than it does in other countries. When packages are sent to private individuals, customs can take anywhere from days to weeks to inspect them,and there is no guarantee that the items will make it to the final destination. Or if you’re shipping to somewhere considered “remote,” like New Zealand, China, or Russia, extra fees might apply. To get a better understanding of how rates depend on destinations, consider using Easyship’s crowdfunding calculator to get an estimate for your campaign.

Packaging

The name of the game here is leveraging package size for a cheaper price or else your shipping costs will balloon. In shipping, packages are measured by the two kinds of weight: deadweight and dimensional (or volumetric) weight. Dimensional weight is calculated by multiplying the length, width, and height of a package and dividing it by a cubic divisor. The charge is determined by the heavier of the two weights. With that in mind, efforts to make packages smaller by even the slightest bit can save you big time cash in the long run.

Speed

When it comes to shipping and speed, it’s a pay to play kind of deal. Meaning that the faster your packages ship,the more it costs to ship them and vice versa. Consider your actual business needs versus wants in terms of what you can afford when it comes to speed. While different courier companies offer various time-sensitive delivery options to cater to your preferred delivery timeframe, overnight delivery can cost five times more than ground delivery.

Taxes and duties

Duties and taxes are an unavoidable part of international shipping. The charges will fall on either the shipper (you) or the receiver (your backers). However, they vary by country, which complicates determining your shipping budget. Start your research early to avoid any surprises down the road. Whether you play around with our calculator or visit our countries page, where you’ll find detailed duty, tax, and customs information for any country you plan to ship to.

How to Package your Product for Shipping

Efficient packaging is customer service. Think about it: Strong branding and safeguarding your items against possible damage come together to leave a positive impression on your backers. And if you’re not careful, packaging can eat away at your budget in one of the many ways that shipping costs accumulate. Now that you know all about package weight, let’s explore some money-saving options.

  • Package Type: Are you going flat-rate or first-class? Box or envelope? What you ship depends on what’s inside — and it’s certainly not one-size-fits-all when your budget is at stake.
  • Size: Even the smallest in packaging can save thousands of dollars over time.
  • Cost: Unless you plan to ship flat-rate boxes, a package’s cost is determined by the size and weight. It’s important to be precise — don’t use a bigger box than you need to

Do You Need a 3PL to Handle Your Crowdfunding Orders?

When all is said and done and you’re ready to ship, you have to decide if you’ll go in-house or outsource the efforts to a team of experts. The latter route is what’s known in the biz as working with a third party logistics provider (3PL). But is a 3PL right for your campaign? Let’s explore.

Advantages

  • Leave it to the pros: Working with a 3PL means that you’ll have a dedicated, full-time staff devoted to packing your orders.
  • Focus on the big picture: Learning warehouse and shipping procedures takes time and effort. Working with a 3PL allows you to focus on the big picture and ideate freely.
  • A global strategy: Avoid issues with taxes and duties by having overseas warehouses, allowing you to serve your international backers with ease. Fulfilling orders in the same country where they’re placed removes the barrier of customs.
  • Speedy deliveries: Choose from warehouses in multiple strategic international and domestic locations to cut down on delivery times and shipping costs.

Disadvantages

  • Loss of control: In the early stages of your campaign, your brand is everything. Outsourcing shipping to a 3PL can make it difficult to maintain a highly curated brand image.
  • Customer service: Two’s company, three’s a crowd. Customer service is further complicated with the addition of a third party — especially if things go south.
  • Lack of infrastructure skills: Some founders like to have their hands in everything. Outsourcing to a 3PL means you won’t have the chance to engage in logistics in a meaningful way.

If you ultimately decide to work with a 3PL, make sure to do your research in the warehouse selection process. Consider whether or not they can handle bulk shipments, if their tech is up to date, the location and what shipping solutions are offered. Working with a partner, like Easyship, helps alleviate the complicated search and fulfillment process.


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