We get it – thinking about shipping logistics is probably the last thing you want to deal with when you're crowdfunding.
However, crowdfunding fulfillment definitely something you shouldn’t ignore. If you don't put any thought into your crowdfunding shipping strategy, it's very possible that a big chunk of your fundraising ends up going towards shipping, causing you to lose out on all profits. That would completely defeat the purpose of crowdfunding in the first place!
Here are some potential problems your campaign may come across and some viable solutions from shipping experts (yours truly!)
Shipping Issues Post-campaign
1. Your Campaign Went Viral... And Now You Have Thousands of Orders to Ship
First of all, congratulations on going viral!
While you might think you can save money by kindly asking your friends and family to help you pack thousands of packages, we highly advise against doing so.
If you think about it, shipping will be the last point of contact with your backers, and how they receive their package will be how they will remember your project.
If they receive a package with merchandised that's ruined or destroyed due to bad packaging, it will not reflect well on your brand's reputation!
In this case, we recommend working with a third party logistics provider (3PL) that can receive your products from your manufacturer. This way they can professionally pack and ship them on your behalf, so you don't have any added stress on you or your team.
Here's what you should consider when looking for a 3PL provider.
2. With So Many Courier Options, It’s Taking Too Long to Find the Right One
While it's tempting to stick with the FedEx's and UPS's of the world, you might be leaving money on the table by not considering more affordable shipping options.
But with over 400 different couriers worldwide, the idea of researching them all can be an overwhelming and manual process.
Lucky for you, there's a hack for this: Easyship's Get A Quote feature.
By using this tool, you can view all available solutions for your destination country, sorted by the cheapest, fastest, and best value for money options.
You can also see details such as tracking service, customer ratings, and duties and taxes.
This helps you avoid going to every courier’s website, entering the same information over and over, and setting up a spreadsheet to compare prices.
Check out our crowdfunding calculator to get an idea of what shipping solutions are best for your campaign.
3. You Received a Shipping Quote From a Courier, and It’s Way More Than You Budgeted For
Common reasons why shipping can be expensive:
- Your packaging doesn't take into account dimensional weight
- Your product contains a dangerous good
- Duties and taxes apply to your shipment for certain countries
Dimensional weight. Want to know a shipping secret? Reducing your package size is the key to unlocking the cheapest way to ship.
Some couriers, in particular express couriers like FedEx and UPS, measure both deadweight and dimensional (or volumetric) weight of a package. They will then charge the higher of the two.
Dimensional weight is calculated by multiplying the length, width, and height of a package and dividing it by a cubic divisor.
Many couriers base their pricing structure on dimensional weight. This is why it’s to your advantage to have efficient packaging; don’t lose money due to unnecessary volume!
Here's what else you can do to save on shipping.
Your product contains a dangerous good. In shipping, dangerous goods can be anything that, if not handled with care, could cause harm to those handling them in transit.
Lithium-ion batteries are the most common dangerous goods that are sent internationally. Specific labeling procedures are required to ensure a safe shipment via international air freight.
Additional paperwork and certain packaging instructions may also be required. There are also restrictions on how many dangerous goods packages can travel at one time.
Because of this, couriers may charge additional fees to process these special shipments. If possible, consider sending your package without batteries.
If that's not an option, be prepared to budget additional funds to cover these fees.
Learn more about dangerous goods.
Duties and taxes apply. When you ship something to another country, you or your customer may be asked to pay additional duties and taxes before the shipment is delivered.
Why? Well, governments tax shipments from other countries because they want to:
1. Protect domestic companies from foreign competitors
2. Control the flow of certain products
3. Raise revenue through taxes
Duties and taxes on shipments are legal requirements that must be settled before your shipment can be delivered, so unfortunately there's no way to avoid payment.
In this case, it's best to research duty & tax rates for the countries you want to ship to by visiting our Countries page. Also, be sure to communicate these updates to your backers, so they know what to expect.
Shipping Issues Post-fulfillment
4. Customers Are Confused About Having to Pay Additional Taxes
If you ship something internationally and duties and taxes apply, your courier will give you the option of sending the package with duties and taxes already paid for (DDP), or unpaid (DDU).
Some shippers prefer to send shipments DDU, as the shipping costs appear cheaper since there are no processing fees that are added on top of the duty that needs to be paid.
However, the caveat is that the seller needs to clearly communicate to the customer to expect to pay additional duties when their shipment arrives in customs.
It's very common for customers to be unaware or misunderstand that these duties need to be paid. When they receive that call from customs requesting payment, many times it's an unwanted surprise.
If you've already sent your shipments DDU, it's best to explain to the customer that they need to pay these duties in order to get their shipment delivered.
However, it's best to choose your courier's DDP option, if it's available.
5. Your Shipment Gets Stuck in Customs
There are many reasons why a shipment might be stuck at customs. The reasons can differ in severity from high (your goods are prohibited for import) to low (having the incorrect paperwork).
To help your shipments get through customs faster, we suggest the following:
- Make sure your product is not restricted or prohibited in your destination country. Taking the time to research whether your product can be shipped can save you from headaches in the future. Use Easyship’s Countries page to check before you ship
- Provide accurate customs values on your paperwork. NEVER under-declare the value of your items. If customs officials are suspicious that the value of your shipment is higher than you claim, it can be confiscated, take even more business days to get processed, and result in additional fines
- Choose shipping solutions that provide good tracking. Solutions that offer tracking numbers with frequent updates can alert you of the status of your package in customs so you can act quickly
For more information about what you need to know when fulfilling your crowdfunding campaign, check out our free crowdfunding guide!