How to ship with Kickstarter: Fulfillment Centers, Mass Shipping, and Packaging
An important financial/technical challenge almost all Kickstarters face is the fulfillment process. Fortunately, if you have made it this part then you have already succeeded, yet we all should want to finish strong. A terrible outcome would be to realize you're not making any money (or negative money) because not enough consideration was taken when factoring shipment costs.
This article will cover the different shipping options a successful Kickstarter may have. And it will discuss some of the challenges I face with the potential fulfillment of my card and dice game Skeptic (Edit: I have since decided not to pursue a Kickstarter, but this research is still relevant for anyone who is dealing with fulfillment responsibilities).
Fulfillment Centers VS Self Fulfillment
There are two options you have for shipping your product. You may either have the product be shipped to your business/house. From there you would personally ship out the product with the help of Stamps.com. Or you may have the manufacturer ship the product directly a fulfillment center. The most established player in the shipment fulfillment industry would be Amazon. But I would not write off other shipment fulfillment companies like Blackbox. Blackbox was created by the same people who made Cards Against Humanity. They have shipped products like Exploding Kittens, which had over 200,000 units sold in their Kickstarter.
"Blackbox works like a co-op: if we all go in together, we get the cheapest pricing, the fastest shipping, and the best service. The shipping is fast. We pay your sales tax. You can customize the packaging and the inserts." - Quote from their website.
Starlit Citadel Fulfillment specializes in the fulfillment of board games. If your product is such, then I would recommend checking them out.
Choosing to use a fulfillment center will eat into your profit. If you sell enough units of product, then you will likely have no choice but to use a fulfillment center. But if you have a relatively small amount of orders, then shipping them with Stamps.com would keep your profit margin healthy.
A caveat with using Amazon is that you need a UPC code. It is a rather inconvenient process to go about getting one. They cost a $250 initial fee and then a $50 dollar annual renewal fee. (Source) There is an option of buying a barcode on buyabarcode.com. A single barcode is $75 on their website; this website has been around since the late 90s apparently, but there are some cheaper options. Nationwidebarcode.com offers UPC codes for $7. They also provide some information about Amazon and UPC codes. According to them, "Amazon doesn’t check the validity or the ownership of codes except rarely when a seller reports a problem with a listing."
By purchasing a secondhand UPC code for your product will be piggybacking on another products UPC code. If you plan on selling your product retail (Walmart or Target), then you will need your own code.
Figuring Shipment Costs
One of the more tricky aspects of shipping is figuring out how much shipping will actually cost. One way to gauge the shipping cost is to fill out a hypothetical forum on your chosen shipment platform. Include your products dimensions and weight. Then choose a hypothetical place that you may send product to. If your shipping international, plan to add $15- 50 on whatever the domestic shipping cost is. It may be more it may be less depending on where you are shipping. But just know that it is a lot of money. There is an option of collecting shipping fees after the Kickstarter campaign has ended, too. Doing this will keep your costs accurate. Some fulfillment centers have satellite centers in other countries. This allows the fulfillment center to ship negate some international shipment costs and hassles.
If your product weighs less than 1 pound (15.9 ounces), then you can easily ship your product anywhere in the USA for a something under 4 dollars. This type of shipping is called "USPS First-Class Mail Package/Thick Envelope (3 Days)". If it is at all possible to have your total package under 15.9 ounces, it would be in your best financial interest to do so.
As of writing this article, I am in the middle of trying to figure out how to ship Skeptic under 15.9 ounces without compromising quality. Many card games can easily ship under 15.9 ounces, but Skeptic requires more than cards to play. The goal is to ship the product with 6 dice cups (currently 3.9 ounces), 30 16mm dice (4.3 ounces), and 60 cards (3.75 ounces). This leaves 4 ounces for a the box to store the game in and the box to ship the game in. So that is likely not enough.
I could use 12mm dice instead of 16mm and cut 3 ounces off the total weight. I could not supply cups. This could save me about 4 ounces. I could not supply a box to store it in and use packaging less than 4 ounces. There are a whole host of options. I don't want to provide a low quality product, and I don't want to charge more for my product. I'll probably end up using lighter cups to shave off a couple ounces. But there is no way I am going to pay $7-8 dollars plus to ship an item if I can modify the product down to less than $4 in shipment cost.
I have not decided whether or not I will be using a fulfillment center or mailing them myself. It all depends on how many units are backed, how many international backers the Kickstarter receives, and the quotes that Amazon and Blackbox give me after I have accurate numbers.
There should also be something said about sending the backer survey. This survey should be used to collect only shipping information or other critical information. Don't ask unnecessary questions for your backer; do that in an optional survey. Send the shipping information survey two weeks before the products ship out. This will ensure you have the correct addresses.
If you're like most people running Kickstarters, your not running an established company with tons of resources and manpower. So you have to be realistic. You want to offer simple stretch goals and simple tiers of rewards. The more complicated and varianced your goals are, the more complicated the manufacturing and shipment process is going to be. My reward levels will only allow backers to purchase multiple games. There is no variance between the product.
Also keep in mind that some you will need to factor in the shipping materials that go into making sure your product arrives in good condition. The manufacturer of your product may be able to provide you with additional shipment boxes and materials. If they do not, then you will have to buy in bulk boxes and bubblewrap to ship with. This only applies to people not using a fulfillment center as they would take care of the shipment needs.
Whether or not you have chosen to use a fulfillment center, some packages will get lost or damaged no matter what. It is just a cost of doing business. If you ship a certain amount of packages, chances are that some will not make it the destination for whatever reason.