“Free Shipping” – It’s something you’ve probably seen advertised on a product before. You’ve probably even been the recipient of it. But, if you’re in the beginning phases of launching a product into the market is it really something you can feasibly offer? Maybe you’re wondering if it’s something you should offer?
Luckily, there is no right or wrong answer and you do have options! In this episode, Nalin goes in-depth about three different ways you can charge shipping during your campaign and discusses the pros and cons of each.
Keep scrolling for a further breakdown of the podcast and helpful links.
[1:10]: What’s Up With Shipping?
Getting the conversation started on whether or not “free shipping” is really doable.
[3:24]: ONE: Integrate the Shipping Cost to the Entire Cost of Production
Add on the shipping cost after you look at all the production costs for making the actual product. That way the price of the product already includes the shipping cost.
[5:58]: TWO: Subsidize Part of the Shipping
You decide to take money out of your own pocket to cover a certain amount of the shipping and the buyer pays the rest.
[7:29]: THREE: Make Backers Pay the Full Price of Shipping
Have backers pay the full price of the shipping.
[9:15]: Additional Information to Take Into Account
There are other things to think about: right custom taxes, duties, VAT, etc.
[10:05]: How to Inform the Backer of Shipping Costs
Being upfront with your backers about the price of shipping is the best route you can take. It allows them to know exactly what they’re signing up for and, in turn, leads them to trust you because of your vulnerability.
[11:46]: Recap: Your Three Options
Do you want to integrate the shipping cost into your entire product cost? Do you want to subsidize part of the shipping cost? Do you want your backers to pay the full shipping price?
Connect with Nalin: https://crushcrowdfunding.com/contact/
Mon, 7/13 3:23PM • 13:23
shipping, product, backers, free shipping, price, cost, subsidize, crowdfunding, pay, launch, crush, shipping costs, talk, implement, ship, integrate, company, entrepreneur, country, margin
This is the crush crowdfunding podcast,
the number one place for
people who want to launch on Kickstarter and Indiegogo. My name is Nalin and I invite you to join me for tips, hacks and insights to get you launched and fully funded. everyone welcome to another session of the crush crowdfunding podcast. I'm really excited to have you here today. And to really talk to you about crowdfunding and how you can absolutely crush your goal on Kickstarter and absolutely crush your goal on Indiegogo. Today we're going to talk about shipping. I know it's a big, big question and it's honestly daunting for a lot of people because not everyone deals with shipping on a daily basis and shipping is honestly kind of like a confusing topic and kind of a big black box. So we're going to talk about it today and kind of ease some of your probably worries and really get you more in the know of how to actually implement some of these strategies and some of these tactics that a lot of campaigns out there actually have implemented. Let's get started by saying that a lot of people who reach out to me a lot of people who I meet face to face a lot of people does ask me I see a lot of projects with free shipping listed, you know, free shipping to the US free shipping worldwide free shipping to everywhere in the world, right? They see all this free shipping listed everywhere. And people are like, how is this possible? How are people doing this? Because when these entrepreneurs they go out and check fulfillment companies go out and check with the logistics companies and delivery companies they see that shipping is a huge cost. Shipping is expensive shipping isn't just you know, 50 cents and you can get a big product from the US or a warehouse in Hong Kong or facility. in Shenzhen. You can't just pay 50 cents And get that delivered to like the UK, for example, right? It's actually really expensive. Actually, one little tidbit that I'm gonna kind of leave you with here before we get into it is that I was working with an entrepreneur was based out in Hong Kong and wanted to ship a product worldwide. And so they were looking at shipping prices for the US versus Canada. Again, the US and Canada are right next to each other as countries right? Right next to each other. It's pretty much the same country sometimes. But they realize that shipping from the same place to Canada was twice the price, two times the price of shipping to the US, although again, it's pretty much in the same area and pretty much in the same location because it gets shipped to the west coast of both of those countries that are right next to each other. So again, shipping can be a big headache, shipping can be a black box. So people again really wonder about shipping and how to do free shipping worldwide. Right? How does this even work? So I wanted to kind of break that down and also break down some different ways that you can actually charge for shipping. On your own campaign. There's three main ways that I'm going to discuss today. And you can go whichever way you want. And we'll kind of talk about at the end like what you have to do, after you've decided on which actual shipping price cost way that you are going to be doing for your campaign. So the first thing that I want to talk about for this particular video again, is like a lot of people just really asked me like, how do I do free shipping worldwide? It's so expensive. How do I do free shipping to be totally frank with you know, nothing in life is really free, right? There's no way it can actually be free, especially if you're seeing from your
logistics people, your fulfillment company that it's like $50 to ship from the factory to the US It was $50. Like, how can you make that free? How's that possible? The best way to kind of talk about this is to give a concrete example one company that I've actually worked with before one entrepreneur that worked with before they decided To do free shipping for their product. And the way to do free shipping for your product is to literally integrate whatever shipping cost that you find into the entire cost of creating the product. So a lot of entrepreneurs kind of go through product creation process and think, okay, we have product cost, and then we have shipping and then we have price point, whatever. And so they tack on shipping after they look at all the product costs for making the actual product, those apply for the materials for the putting it together and things like that. However, if you want to charge free shipping for your project on crowdfunding, I really recommend to look at it more in a holistic manner. say if your product costs $5 to make and $15 to ship then say your product cost is actually $20 and price your products, the price where people buy it, price it so that you can actually still have a margin left over after paying all the costs for shipping and your product right so there's three levels, the price you will pay margins you have in the middle between that, and the cost of the product and the shipping. So that's really honestly how people do free shipping. They literally just integrate the cost for that shipping, they talk to fulfillment companies early to get those numbers crunched out for if it's, you know, the US or worldwide or just US and Canada, just US and Australia, just the EU and us, they crunch out all these numbers early, so that they're able to integrate these cost numbers for shipping into the entire holistic product costs so that they're able to price everything beyond that, so that they still have leftover money, you know, margin to play with in terms of, you know, promotions or buffer for any hiccups that come up pretty much And so again, that's the first way you can, you know, charge shipping, you can do free shipping by actually putting that shipping cost into the product costs and, you know, kind of bundling that together as one big cost. The second way you can actually Do shipping for your crowdfunding campaign is to subsidize part of the shipping. Right. So for example, you can pay 50% of the shipping cost, and backers are paying 50% of the shipping costs. And you can just literally go through on crowdfunding on your Indiegogo campaign on your Kickstarter campaign and insert 50% of the full shipping costs into each country as you're putting in your awards as you're putting in your perks. Again, it can be any percentage that you subsidize, it can be 5%, it can be 90% of us subsidized whatever you want to subsidize, just make sure to remember that subsidizing shipping literally means that it's coming out from your pocket, the shipping cost is coming out from what you are paying for the product. So make sure to include this in your calculations of what can happen in the long run if you do subsidized 5% if you do subsidized 90%. What happens what happens in those cases? There's the product makes sense as the math makes sense. Does it mean that you're are actually losing money going into this crowdfunding campaign and you won't even have enough money to put the product into production and manufacturing and send it out to people. If that's the case, then maybe this is not the way to go. Or maybe you have to look at subsidizing a lot less and telling your backers that, hey, this is how much you need to pay for shipping in order to
get the product to yourself.
That's the second way you can kind of implement
shipping your crowdfunding campaign, right. It's the subsidized part of the actual shipping cost itself. The third way, which is kind of the way a lot of people go down is to have backers pay the full price of shipping, the full cost of shipping. So there's lots of pros and cons to this right pro from your perspective.
As an entrepreneur, as
you know, new company that's building up that's growing that's actually launching from that perspective,
it's easy on cost, right? Like the backer actually
pays that full price. The backer actually just takes all this under their wing and none of the responsibility is you and all you have to do is actually take that money and get that thing shipped up pretty good, right? The con is that a lot of people are just really used to free shipping from the likes of like Amazon Prime, for example, or really quick shipping turn around if they have enough items in their cart, you know, like $75. And we'll give you free shipping for your entire purchase. So people are getting used to things like that. So seeing high shipping number, people might not be as inclined to back your project just because they're seeing that it's so high, especially if you're launching a big hardware product or heavy hardware product or a product that's just really difficult to ship just the packaging is weird or something like that, or something that's like oddly shaped, like they can see the shipping price and just be turned away or be turned off from your own project.
these are the top three things you have to really think about in terms of like how you want to implement the actual shipping itself. Do you want to integrate the cost into your entire product costs, so you offer free Shipping by pricing accordingly, do you want to subsidize part of the shipping costs? And kind of have your backers help pay in a way? Or three? Do you want your backers to pay the full price separately on top of the product costs, the tricky thing when it comes to shipping is actually not just getting the product to the right country. So for example, if your product is made in China, it gets sent to a warehouse in the US and then it has to go to a different warehouse in the UK or it has to deliver to a backer in Germany, right, there's a little additional things you have to think about two which is taxes and the IDs, right custom taxes, duties, VAT. So a lot of these things you actually have to drill down with your fulfillment company to so that you get to the bottom of it before you launch on your crowdfunding campaign because sometimes you really do find out that these additional taxes these additional fees, make your product two times or three times or four times the price that you're actually selling at which kind of is a bummer for the end user, like if there's a way to actually integrate that price, or there's a way to let people know that this is coming to them for when they're picking up the product, that's going to be really, really a great customer experience, right? Like, seriously, whatever you do, whichever way you choose to implement shipping, whichever way you choose to implement any of these that you're going to be rolling out, I really encourage you to tell your backers exactly what you're doing and exactly what to expect, right? So that they're no surprises, say, Hey, I'm subsidizing 50% of the shipping, because I really want this product to go out to your guys. I really know that shipping is a tough expense. So I'm really helping subsidize this. Just FYI, there's also some taxes if you're in countries that collect taxes for products going into the country. So by just saying this and saying that you've done the research, showing exactly that you know you're doing that you're credible and you're trustworthy and that you are Really just kind of have it figured out if you understand exactly what the backer experience is going to be like and letting them know they're going to trust you, they're going to be like, oh, okay, so this is why this person chose this way to ship. Oh, this is why I'm paying 50% of the shipping. Like, although some campaigns offer free shipping, this person is being really transparent and saying, hey, free shipping isn't really free shipping, and they're helping me pay for the shipping. And they're also letting me know, like, hey, there's gonna be extra fees and stuff. And this is what I can expect. So the more transparent you are with your backers of how you decide to do shipping, like it's gonna really help you in the long run, because there'll be no surprises, right? People aren't going to be just mad going to pick up your product and seeing that they have to pay another $300 is gonna be bad if you don't tell them about that before. Get there's three ways you can really implement shipping for your campaign. Three ways are to integrate the cost of the shipping into the product cost and just pricing your entire project your entire different levels and tiers of pledges and rewards. In order to cover that shipping and have a margin, the second way is to really subsidize part of the cost of shipping so that you're sharing that cost with the backers and just letting them know
what exactly you're doing. And the third
way is having your backers paying full separately from the cost of everything else, I can say, Hey, this is what the product is priced at. And then on top of that, pay shipping. Again, the three different ways to just roll out shipping, you can do whatever you want to do for that. So thank you for being with me here today. If you need a crowdfunding expert, feel free to get in touch, you can get started by heading to crush crowdfunding.com. Lastly, I would be really grateful if you could leave a review for the podcast because it will really help others who want to learn about crowdfunding just more easily find out about the podcast. Thank you so much for being here with me, and for subscribing to the podcast and for continuing to listen and just being here with me to go on this journey. To crowdfund your product and your idea, I will see you guys in the next session.
Thanks for listening to the crush crowdfunding
podcast at crush crowdfunding.com. Tune in the same time next week for more ways to crush your launch.
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