The Kickstarter Blog

The Price Is Right

Last October, a woman named Spike launched a Kickstarter project to fund a comic called Poorcraft. It wasn’t all that different from other comic projects that launched at the time, but this one found enormous success, finishing 227% funded. Why?

There are many factors, but one in particular stands out: how Spike priced her rewards. Spike set the price of a signed comic book at just $10, a reasonable amount for the nearly 500 backers who opted for it. Spike found the majority of her support from lower tiers: 83% of her $13,600 came from pledges at $50 or less.

A key factor in a project’s potential success is how its rewards are priced. The PBS-style fundraiser would have us believe that tote bags should cost $100 and Ken Burns DVD sets $400. There’s an assumption that the act of sponsorship carries a tax: “Because of your generosity, items are marked at four times the sticker price.”

But Kickstarter isn’t charity: we champion exchanges that are a mix of commerce and patronage, and the numbers bear this out. To date the median pledge is $25. Small amounts are where it’s at: 83% of successfully funded projects have a reward priced at less than $20. It’s not about hunting whales, it’s about amassing support.

What works? Offering something of value. For $10 a backer should get something (a product, an experience, access, etc) in exchange. What doesn’t work? Charging a premium. Projects without a reward less than $20 succeed 35% of the time, while projects with a reward less than $20 succeed 54% of the time.

That’s not to say Kickstarter projects must mirror a retail experience. There are infinite possibilities to do something creative and outrageous at all kinds of price points. But it’s important to consider the actual value of what you are offering.

Actual value considers more than just sticker price. If it’s a limited edition or a one-of-a-kind experience (writing a song for someone, etc) there’s a lot of flexibility based on your audience. But if it’s a manufactured good (DVD, CD, book), then it’s a good idea to stay reasonably close to its real-world cost.

Every Kickstarter project is an economy sculpted by its project creator. They set the prices and the rewards. But the larger market has a voice, too. Things like what an item might cost in a retail setting, what potential backers see as a fair or fun exchange, and even how other projects might price items. Creators ignore these forces at their own risk.

There is no magic bullet, and we encourage every project to be as creative and true to itself as possible. But there are lessons to be learned. Offer rewards of real value and be fair with your pricing. Put yourself in your backers’ shoes: would you drop the cash on your rewards? The answer to that question will tell you a lot about your project’s potential.

Comments

    1. Shahafshar.small

      Creator Shah Afshar on June 22, 2011

      Thanks, This really helped.

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      Creator Claudia Perry on June 23, 2011

      This is helpful.

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      Creator Layla Kilolu on June 24, 2011

      Thanks for the tip! I am really excited about getting started on my project! :)

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      Creator Al Caldwell on June 25, 2011

      Thank You

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      Creator Michaelangelo Rodriguez on June 25, 2011

      I like this idea a lot. I'll use it!

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      Creator Insult Skateboards on June 25, 2011

      Thank you very much for the tips. I am sure this will help us.

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      Creator Chris Kohout on June 27, 2011

      This sounds good, but I'm wondering how she had anything left of a $10 donation after printing a 120 page book, packaging and shipping it out?

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      Creator michael morales on June 28, 2011

      thanks for the help

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      Creator OMO MISHA on June 28, 2011

      awesome advice!

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      Creator Katie Rubin on June 28, 2011

      Thank you! That's super helpful! Blessings! Katie Sabira

    11. Lou%20derr%20wild%20west%20days%20042.small

      Creator Lou Derr on June 29, 2011

      Excellent advice. As I am almost ready to start my new project. Lou Derr

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      Creator Jymeni Productions, LLC on June 30, 2011

      Thanks a lot! i'll be using this when getting my page together! :D

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      Creator Mae Scott on July 1, 2011

      Thanks for the light

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      Creator Cedric Lee Bradley on July 4, 2011

      Thank you got to go do some brainstorming!

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      Creator Dave Garrett on July 6, 2011

      This has been helpful... as well as watching the videos of others( both successful and unsuccessful). My project has been accepted and now I am in the process of figuring out rewards, and how I'm going to do my video. Thanks for the tips.

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      Creator Ken Gregg on July 8, 2011

      Very helpful Yancey, thank you.

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      Creator Joshua Sweeny on July 11, 2011

      Great to know!

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      Creator Jeff Brooks on July 11, 2011

      Thanks!

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      Creator Vlada Tomova on July 13, 2011

      Very helpful - made up my mind!

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      Creator Joanna Harcourt-Smith on July 16, 2011

      Thank You for making this available ... very helpful !

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      Creator STEVE on July 16, 2011

      we can make it work

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      Creator LeAndra Shipps on July 16, 2011

      Thank you so much for the advice. One piece of advice can turn the world.

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      Creator Kevin A Hickling on July 18, 2011

      Very informative, thank you.

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      Creator Mike on July 18, 2011

      Thank You! I just readjusted all my rewards

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      Creator Todd Monaghan on July 22, 2011

      This is enormously helpful! tm

    26. 1%20-%20straightvalue%20pic.small

      Creator StraightValue on July 22, 2011

      Kickstarter staff are true disciples of candor and service to others. Let us all mimic in our own way.

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      Creator Destenee Mckenzie on July 23, 2011

      Amazing! Thanks for the tips!

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      Creator Gary Wagner on July 25, 2011

      This comment has been removed by Kickstarter.

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      Creator Steve Robinson on July 27, 2011

      Your advice is greatly appreciated and I'll do my best to heed it. You have had such success with your program that it would clearly be a mistake not to do so.

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      Creator Mike Lowther on July 27, 2011

      Thank you!! This was MUCH needed! :)

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      Creator Carl Dancy on July 30, 2011

      Excellent advice. Thank you.

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      Creator Lawrence Taylor on July 31, 2011

      Glad I read this before taking the leap into rewards. I'll have to convince a partner too!

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      Creator ryan ewell on August 1, 2011

      good to know! thanks

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      Creator TLucas7 on August 9, 2011

      excellent marketing advice. i will take it and learn greatly from it.

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      Creator Mark Starks (deleted) on August 9, 2011

      Very helpful! Thanks!

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      Creator Sandor Nagy on August 10, 2011

      THANK YOU! I'm going to use this info to set up my reward-system. You guys rock!

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      Creator Sean Robbins (deleted) on August 11, 2011

      This is very helpful! Thank you!

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      Creator Myrna on August 12, 2011

      This is fabulous. I've already made adjustments...thank you!!!

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      Creator Movement for the Urban Village on August 17, 2011

      Thanks for the tip! I am re-formulation now!

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      Creator Freda Pongetti on August 22, 2011

      This was really helpful. Thanks a lot!

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      Creator Al Barbosa on September 1, 2011

      Thank you this helped me put things in perspective.

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      Creator Caroline Ledgin on September 5, 2011

      This was great advice that I plan to use today! I will be launching this week and I feel lucky to have read this now.

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      Creator Veronica L. Shealy on September 7, 2011

      Great info! Thanks a bunch!

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      Creator GODFREY YOUNG on September 16, 2011

      THANK YOU SO MUCH FOR THE INFO.

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      Creator Drake and Sofia on September 26, 2011

      wow this probably just saved our project from being a failure... thanks :)

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      Creator Felix Leo Campos on September 26, 2011

      Too often the "little people" aren't thought of. Historic references provide examples of people being undervalued and ostracized from a share of the gains. Our event, fortunately for those "little people", was created with your consideration in mind. Which is why our price is as low as it is.
      It is good to know that we're not the only ones who are as considerate.