Most hardware creators know that scaling up for mass production is a challenge. But many first time creators underestimate the complexity of fulfillment: packaging and shipping the finished product once it rolls off the production line. Depending on what you’re creating, this could mean coordinating multiple carriers and warehouses, integrating your storefront with shipping software, or even developing your own custom system. Welcome to the land of spreadsheets... lots of them.
To help shed some light on fulfillment, we asked five Kickstarter creators to share their experiences with shipping rewards. Each of these teams faced their own challenges, from shipping physically large products to managing thousands of rewards in-house.
Here’s who we spoke with:
Paul Stoffrogen, Teensy
The team behind the Teensy microcontroller packaged rewards in-house over the course of a week.
Alexandra Fine, Dame Products
Dame Products relied on a mix of third party logistics companies and friends and family to box and ship their product to 4,800 backers.
Filippo Yacob, Primo Toys
Primo Toys shipped their educational robot, Cubetto, to thousands of Kickstarter backers through a network of fulfillment centers around the world.
Oscar Lhermitte, MOON
Designer Oscar Lhermitte and the crew behind MOON, a lunar globe, carefully assembled, packaged and shipped all 300 of their Kickstarter rewards in-house.
David Weiner, Priority Bikes
Veteran creators Priority Bikes have become fulfillment pros after shipping thousands of bicycles across three campaigns.
Briefly describe your fulfillment process. How did you get your product from the factory floor into a backer's hands?
Teensy: Four of us worked ten hours a day for a week in my living room to package 3080 Teensy microcontroller boards. We shipped them all on time!
Priority Bikes: We created a project plan charting out all interdependent components with expected lead time, padded by fifty percent. Then we set deadlines for suppliers that were a month before our real deadlines. We checked in constantly, reinforcing their significance to our business.
Primo Toys: We took great care to segment all of the rewards in our campaign by continent and country. We selected a shipping company to send product in bulk to each region. We used DHL and UPS to ship from warehouse to doorstep (final mile). We planned it all way before the campaign went live to ensure distribution would happen smoothly.
MOON: We decided to take care of the assembly and shipping ourselves in order to understand the process and logistics of manufacturing. We had to deliver 300 MOONs, so it was a manageable number. As expected, it was a real logistical challenge and we learned so much. We are now doing the second batch, entirely assembled by a new local supplier, and we know exactly how to guide them.
Dame Products: For Fin, we did our own fulfillment. We worked with Flexport to ship our product to Brooklyn (due to the inevitable delays we ended up air shipping the product). Then we had a pizza party, invited friends and loved ones to eat pizza and pack boxes. We used Shipstation to print out labels.
How did you estimate shipping costs before you launched your campaign?
Priority Bikes: We work with UPS and FedEx to estimate the costs, positioning one against the other to drive down the rates. When possible, we use USPS due to their lower rates, though we need to bake in additional loss and damage.
MOON: We did not have a shipping partner before we launched but we did look at rough quotes from five to ten companies. We are using DHL and are actually paying double what we asked the backers for. But it is fully tracked, insured and signed for. I would strongly advise thinking about how many rewards you might have to ship and getting accurate quotes from shipping companies before launching a campaign.
Dame Products: We estimated the weight and size of the package we would use to ship the product, and used ShipStation to calculate prices to different locations.
What advice do you have for creators considering international shipping?
Teensy: The sad reality for shipping internationally from the USA is the USPS rates increased dramatically several years ago. Recently the commercial carriers have started responding with services to ship substantial volumes of small packages at competitive rates. Here's info about the service we used.
Priority Bikes: Get rates by country before your launch. DHL and USPS are best at this. Since duties and taxes vary greatly by country, we recommend having the customer be responsible for those costs, and possibly brokerage fees. If the customer is responsible for the taxes, duty, and brokerage fees, be really clear about that upfront.
Primo Toys: Avoid shipping worldwide if you can. If you choose to ship worldwide, make additional customs costs clear to backers in the FAQ section of you campaign. Make sure you know your reward packaging size and weight, and calculate each rate. Always add a small shipping cost contingency.
Dame Products: We definitely had shipping costs increase on us. International shipping can be costly and the taxes often include the shipping fee. Fedex charges a fee for fronting the duties to ensure delivery. This really adds to the overall cost — don't do this.
What do you wish you’d known before you started fulfilling your last project?
Priority Bikes: I wish we had anticipated more shipping loss and damage. We often don't plan for how many packages will get damaged or lost, and it wasn't worked into our financial model.
MOON: Unfortunately, you have to be very straightforward and sometimes almost bossy with your suppliers to get the parts on time and at the quality you need.
Dame Products: We did our own fulfillment for way too long. Never again. However, I don't know if I'd recommend fulfillment centers for Kickstarter projects — only because they have monthly fixed charges and you may be out of stock for a month or two just incurring charges from a warehouse as a new producer. I know there are fulfillment houses now that really specialize in Kickstarter campaigns [like Blackbox and Lumi]. That's probably what I would do if I was just starting out.
Whether you're just starting out or are an experienced creator, taking the time to plan for fulfillment before your Kickstarter campaign can save you a lot of time and money. Do you have other questions about fulfillment? Let us know in the comments.