Delivery - or the “quickest way to go bankrupt on Kickstarter”
Recently, the phenomenon, called in a strange way Crowdfunding, is rapidly gaining momentum. I want to draw the attention of dear readers to one aspect that is rarely considered when discussing its possibilities for a startup of your project. This is logistics. Like many other pitfalls, the underestimation of this factor at the stage of calculating the preliminary cost of lots can lead to unprofitability of the project, which successfully raised funds at the Kickstarter site.
If you are thinking about launching your project, then this article is about someone else's sad experience and subtleties of mail in the United States, undoubtedly for you. Many others may also be interested.
And so I represent the translation of a fresh post by Eric Delman from January 28, 2013 about the project of creating playing cards.
High prices for the delivery of goods have been subjected to severe criticism. Many of the backers (donors who make bets) were surprised that similar projects cost them much cheaper, why are we so expensive? The reason is quite simple, all because of the cost of shipping.
Take, for example, a simple card project “Call of Cthulhu”.
2500 card decks, this is the number of orders that we wanted to achieve in forty days of development of our Bicycle brand “Call of Cthulhu” playing card project. We expected that the transfer of two or three decks would cost a few bucks in our country and possibly twice as expensive when delivered abroad. Having made quick weight calculations, we calculated that the price of shipping abroad at $ 8 will cover in most cases the cost of delivery. We could not imagine how wrong! In fact, we were fundamentally wrong.
During the first week, we received orders for 5,000 decks. Inspired by the success, we began to look for additional incentives to maintain the popularity of the project for the remaining thirty days. It was then that we encountered difficulties.
')
Before you start a mailing list, you must calculate how much of the product will fit in each package. Initially, we ordered a ton of heavy parcel tubes measuring 4 by 30, hoping that we could put the illustrations rolled up in the tube, and put decks in the middle. When we received tubes, illustrations and decks, we realized that our idea was not justified, since the decks inside slid and thus could break the illustrations. Then we tied the deck at the top of the tube. Everything would be fine, except for two points.
1. The rope kept bad
2. Larger tubes were heavier, their total weight exceeded 16 ounces. The critical number is 13 ounces, which we will explain below.
Thus, we developed two different delivery models, depending on where the goods were delivered. The first is the delivery in tubes of 24 by 4, which kept the uncut sheet with illustrations, and also allowed us to fill both ends with packaged decks, 12 on each side. We used this method for delivery abroad, because he allowed to fit everything in one package and cost about $ 20-30 per package. If we packed uncut sheets with illustrations separately from the decks, it would cost us $ 13-16 plus $ 17 more.
In the US, any number of over 3 decks is immediately packed in a small box. Unfortunately, no more than 8 decks fit into such a box, any way out of this amount would entail, either increasing the size of the box or the number of boxes. The standard packing material is a small box for $ 5.35 and a tube costing about $ 4 (including the cost of a tube).
Due to the fact that the size and weight of each Becker bet was different, the packaging process was not an easy task. In the end, I examined each package to determine what the smallest package weight would be, sometimes I was mistaken and I had to completely repack the contents. It must have been due to the add. packaging materials and the like.
Our biggest problem was the additions (accessories). On the one hand, they encouraged investors to invest in our project, and on the other, added weight to each package.
Say, a foreign investor starts with a bet of $ 15 for two decks, moreover, that transportation abroad costs $ 8. Then a coin, a poker set and 4 dice were added as rewards. Initially, the weight was about 8 ounces. With additional accessories, each weighing 2 ounces, the total weight was close to 14 ounces.
In the states, this would reduce the price to at least $ 5.35 (instead of about $ 2.30), while abroad, it would reach $ 16.95 (instead of $ 8-12, depending on the country)!
Remember the key number - 13 ounces?
Anything that goes beyond 13 ounces in the United States means that you have to go to boxes of $ 5.85; It seemed to me that earlier we mentioned a lower figure - $ 5.35. It was so, but this figure was effective only until the 27th of January. Guess why? Yesterday, the US Postal Service significantly raised all its prices. Remember, no matter what the weight, you need to round to the nearest ounce, and in a big way. The following is a table of costs for transporting various decks:
USA
8 ounces - 2 decks - $ 2.55
11 oz - 3 - Decks - $ 3.08
4-8 decks - $ 5.85
international market
8 ounces - 2 decks - $ 12.75
11 ounces - 3 decks - $ 14.90
15 ounces - 4 decks - $ 16.75
5-8 decks– $ 24.95
To deliver all this abroad, it took us about $ 6, plus each dollar for a dollar. Paying $ 8 for an illustration, as you can see, we did not get any benefit, $ 8 only covers transportation abroad. We were in the black only when the investor ordered up to 5 pieces (a larger quantity required the use of another tube).
To date, we have spent $ 13,700 for transportation and more than $ 2,200 for mailing. On average $ 7.20 per investor. Taking into account the $ 44 average rate from the investor, transportation bills accounted for approximately 16% of this rate. Given that Kickstarter / Amazon takes about 10%, you should make sure that production costs are less than 74% of the bid amount.
* (handling, sorting, packaging, labeling and other works)
One thing we did not include in the list is the handling of goods. The numbers above include only the cost of the delivery itself. We did not mention the infinitely long hours (I counted somewhere around 320), which we spent packing, weighing, typing addresses and filling in customs forms. My job is only to manage the company and control all these processes. All this took almost 2 months, and during this time I have not received any profit. So the next time you want to send more than 2,000 packages by mail (I have sent 2,700 so far), think about how valuable your time is to you. All this by itself is not delivered.
If you are thinking about launching your project, then this article is about someone else's sad experience and subtleties of mail in the United States, undoubtedly for you. Many others may also be interested.
And so I represent the translation of a fresh post by Eric Delman from January 28, 2013 about the project of creating playing cards.
High prices for the delivery of goods have been subjected to severe criticism. Many of the backers (donors who make bets) were surprised that similar projects cost them much cheaper, why are we so expensive? The reason is quite simple, all because of the cost of shipping.
Take, for example, a simple card project “Call of Cthulhu”.
2500 card decks, this is the number of orders that we wanted to achieve in forty days of development of our Bicycle brand “Call of Cthulhu” playing card project. We expected that the transfer of two or three decks would cost a few bucks in our country and possibly twice as expensive when delivered abroad. Having made quick weight calculations, we calculated that the price of shipping abroad at $ 8 will cover in most cases the cost of delivery. We could not imagine how wrong! In fact, we were fundamentally wrong.
During the first week, we received orders for 5,000 decks. Inspired by the success, we began to look for additional incentives to maintain the popularity of the project for the remaining thirty days. It was then that we encountered difficulties.
We list all the pitfalls that we stumbled upon and which our followers should fear.
')
You must accurately determine the size of the package.
Before you start a mailing list, you must calculate how much of the product will fit in each package. Initially, we ordered a ton of heavy parcel tubes measuring 4 by 30, hoping that we could put the illustrations rolled up in the tube, and put decks in the middle. When we received tubes, illustrations and decks, we realized that our idea was not justified, since the decks inside slid and thus could break the illustrations. Then we tied the deck at the top of the tube. Everything would be fine, except for two points.
1. The rope kept bad
2. Larger tubes were heavier, their total weight exceeded 16 ounces. The critical number is 13 ounces, which we will explain below.
Thus, we developed two different delivery models, depending on where the goods were delivered. The first is the delivery in tubes of 24 by 4, which kept the uncut sheet with illustrations, and also allowed us to fill both ends with packaged decks, 12 on each side. We used this method for delivery abroad, because he allowed to fit everything in one package and cost about $ 20-30 per package. If we packed uncut sheets with illustrations separately from the decks, it would cost us $ 13-16 plus $ 17 more.
In the US, any number of over 3 decks is immediately packed in a small box. Unfortunately, no more than 8 decks fit into such a box, any way out of this amount would entail, either increasing the size of the box or the number of boxes. The standard packing material is a small box for $ 5.35 and a tube costing about $ 4 (including the cost of a tube).
Due to the fact that the size and weight of each Becker bet was different, the packaging process was not an easy task. In the end, I examined each package to determine what the smallest package weight would be, sometimes I was mistaken and I had to completely repack the contents. It must have been due to the add. packaging materials and the like.
Each ounce matters / Be careful with all sorts of supplements (accessories)
Our biggest problem was the additions (accessories). On the one hand, they encouraged investors to invest in our project, and on the other, added weight to each package.
Say, a foreign investor starts with a bet of $ 15 for two decks, moreover, that transportation abroad costs $ 8. Then a coin, a poker set and 4 dice were added as rewards. Initially, the weight was about 8 ounces. With additional accessories, each weighing 2 ounces, the total weight was close to 14 ounces.
In the states, this would reduce the price to at least $ 5.35 (instead of about $ 2.30), while abroad, it would reach $ 16.95 (instead of $ 8-12, depending on the country)!
Remember the key number - 13 ounces?
Anything that goes beyond 13 ounces in the United States means that you have to go to boxes of $ 5.85; It seemed to me that earlier we mentioned a lower figure - $ 5.35. It was so, but this figure was effective only until the 27th of January. Guess why? Yesterday, the US Postal Service significantly raised all its prices. Remember, no matter what the weight, you need to round to the nearest ounce, and in a big way. The following is a table of costs for transporting various decks:
USA
8 ounces - 2 decks - $ 2.55
11 oz - 3 - Decks - $ 3.08
4-8 decks - $ 5.85
international market
8 ounces - 2 decks - $ 12.75
11 ounces - 3 decks - $ 14.90
15 ounces - 4 decks - $ 16.75
5-8 decks– $ 24.95
Illustrations
To deliver all this abroad, it took us about $ 6, plus each dollar for a dollar. Paying $ 8 for an illustration, as you can see, we did not get any benefit, $ 8 only covers transportation abroad. We were in the black only when the investor ordered up to 5 pieces (a larger quantity required the use of another tube).
How big are the losses?
To date, we have spent $ 13,700 for transportation and more than $ 2,200 for mailing. On average $ 7.20 per investor. Taking into account the $ 44 average rate from the investor, transportation bills accounted for approximately 16% of this rate. Given that Kickstarter / Amazon takes about 10%, you should make sure that production costs are less than 74% of the bid amount.
Cargo handling
* (handling, sorting, packaging, labeling and other works)
One thing we did not include in the list is the handling of goods. The numbers above include only the cost of the delivery itself. We did not mention the infinitely long hours (I counted somewhere around 320), which we spent packing, weighing, typing addresses and filling in customs forms. My job is only to manage the company and control all these processes. All this took almost 2 months, and during this time I have not received any profit. So the next time you want to send more than 2,000 packages by mail (I have sent 2,700 so far), think about how valuable your time is to you. All this by itself is not delivered.
Source: https://habr.com/ru/post/167839/
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