30

subscribers
How did you decide which fulfillment company to work with?
Last activity on  |  6 answers
We decided to use Integracore in the USA and Ideaspatcher (now renamed "Nift" - please note the edit note below) in the EU.  The main reason for choosing each of these is that they offered a combine-assemble-shrinkwrap need that we had at the time (rare, but needed). The secondary reason we chose Ideaspatcher is that they will act as your "Importer of Record" in the EU.  That means they pre-pay VAT on the manufacturing side of things, so customers don't have to front-door pay VAT on the retail value side of things.Integracore was ok to work with, but pretty pricey.  I don't think we'd choose them again unless more shrink-wrapping shenanigans was needed.  Shipnaked (aside from their not-so-household-friendly name) is now really trying to storm the Kickstarter fulfillment market with a pretty solid business and pricing model.  We'll see if they accomplish what they're setting out to do.  We'll be working with them on our next project to assess what they bring to the table.Happyshops in Germany has been pretty great, but there's a pretty significant language barrier, otherwise has been excellent.EDIT: I dislike saying something disparaging, but I'm here to serve you, not the companies I've worked with.  To this end I share that working with Ideaspatcher has been a terrible experience in the long run.  They delayed shipping our products over 6 weeks (costing us over $3500), and are still holding our excess items that should be returned to us for over 5 months as of the time of this writing, and are now ignoring my emails on the topic.  We are not the only company they have wounded in 2016, and so they have renamed themselves "Nift" to dodge the bad press.  They are strictly to be avoided.  Sorry for the negative news.Heart if this was helpful.Warm regards,John Wrot!Gate Keeper GamesMore advice at www.gatekeepergaming.com
John Wrot!

19

subscribers
How did you estimate the amount it was going to cost to do your project? How close were you?
Last activity on  |  12 answers
We analysed it to *death* we accounted for every penny - we weighed each reward and looked up the US and international postage rates - we included the cost of a new laptop and estimated the amount of electricity we'd use.   We priced shipping boxes, the plastic bags the product went into, the stickers that sealed the bags down.  But it's still very hard because some costs are 'fixed' (that laptop) no matter whether you just make goal or whether you sell $10,000,000 worth - and others scale with the number of rewards you ship.  Some other things like leasing a workshop or employing someone to make rewards when it's too much for you to do it cause sudden 'jumps' in the income-versus-profit curve.  So we did the math for every $10,000 increment from our minimum goal up to 50 times what we thought we could *possibly* make and made sure that we'd be happy and safe from financial ruin at every single increment.You simply cannot over-analyze this stuff.As others have said, postage is a major pain.   Most projects offer free local shipping - which is fairly easy to estimate - but overseas is a nightmare.   Some places have it where the size of the box matters, others where it's the weight.   If (for example) you live in the USA and you estimate that 20% of your stuff will go to Europe and 20% to Australia and you find that you get a cult following in Japan - then you might get utterly screwed on postage....but if all your overseas sales are to Canada then you'll be overpricing your international shipping for those guys.   So make BIG allowances for that.Don't forget that you'll be paying taxes on your sales - either personal income tax or business tax or both.Depending on the nature and complexity of your rewards, expect perhaps around 5% of your shipments to go wrong in some way - you may have to re-ship items that the backer claims went missing (maybe they did, maybe they didn't - you'll never know).   Stuff may be faulty, you'll probably end up posting the wrong thing to some of your backers.Just analyze the heck out of it all.
Renee Launer

18

subscribers
How do you handle customs declarations for international shipping?
Last activity on  |  9 answers
A great question!Here's the facts: Your backer rewards are absolutely Merchandise.  They are not gifts, and no government in the world will see them as such.  Period.  : OCan you mark it "gift" and get away with it?  Probably, but it is international tax evasion.  If you get caught... you're gonna find yourself in a lot of trouble.  : /  Simply not worth it.-Anecdote: We sent out rewards all over the world.  We sent all items to the EU with properly declared customs forms as merchandise and the actual values of the products.  Many of them came back to us anyway because the customs agent (as every one is different) couldn't find a packing slip with item-by-item value declaration on it, and he wanted to be 100% certain to milk the person of every penny ..err euro.  -  And that was on properly declared items.So yes: Merchandise.  And yes, you should mark it the full value (of the pledge level).  If you included shipping in the pledge value you can reduce the declared value of the package by the amount of included shipping.  When they are charged VAT it will be on the value of the package + the cost of shipping.  This new total will roughly reflect the actual pledge amount, and thus they will charged the correct amount of VAT without being charged on shipping twice.-Suggestion: Use E-declarations by using an online service like USPS.com, Stamps.com, or paypal.com/shipnow. - Filling out paper forms by hand is murder; the e-declaration is really really easy as it imports data from previously filled out fields, then asks simple questions like: Merchandise or Gift? ; )Always open to private or specific help as well,John Wrot!
John Wrot!

18

subscribers
What do you do when your project is WAY more popular than expected?
Last activity on  |  7 answers
I was expecting a couple hundred backers, but got vaulted to 3,400 backers very quickly. "Would be nice to get $5,000" turned into $105,000 over a couple weeks. https://www.kickstarter.com/projects/fringefocus/the-acme-corporation In fact, the majority of my backers were in the final week of my project. On top of that, my project ended on December 24th, with only one week left in the year.That means I needed an accountant, really fast. What started as a personal project became a thing that pushed me several income tax brackets higher, with only one week to get the numbers straight (to avoid paying self employment tax on 100 grand of unexpected income). Here are some important notes regarding the actual money:1. Hire a professional accountant (or accountant + bookkeeper), and explain to them the mountain of cash that is approaching your account.2. If you didn't already set yourself up as a business, do so immediately (ideally before your project even closes). An accountant can usually help you choose between an LLC, or S-Corp. I prefer an S-Corp (more paperwork, but no self employment tax!). Your mileage may vary by state.3. Make sure you have a business checking account (easy to set up anywhere) completely separate from your personal accounts. This is not only easier to manage mentally, it will help immensely if the IRS ever comes knocking for an audit. Keep your business finances separate from your own, and save yourself a headache 5 years from now.4. Catalog every expense, to insane detail. Every piece of tape, every sheet of paper, postage, materials, staff costs, etc. You're basically gonna pay tax on profit, but not on expenses. And no matter how large your pile-of-cash is, the majority will be expenses for rewards. Make sure you're profitable by envisioning worst-case-scenario prices for materials, postage, delays etc. (although this is obviously a step you should have tackled before even starting a project.)5. If your item is still available, make sure you notify your backers / future customers / new people that missed the Kickstarter where you work can be bought. I developed https://fringefocus.com into an easy-to-browse art store to capture those post-kickstarter customers (as well as new people).That's the immediate stuff, and is boring. Here's the fun stuff that happens when you get a much larger community than anticipated.1. Your backers are now your fans, your testing grounds, your audience for future projects. Instead of working in a mysterious vacuum, you have hundreds / thousands of people excited to see your new work! More than all the project revenue, the #1 resource I gained from Kickstarter is the 3,400 cool people willing to check out, share, and enjoy my future work. My Fringe Focus Newsletter http://fringefocus.us5.list-manage1.com/subscribe?u=31d2b1187f4779a02d1a464eb&id=1cf81bdf22 is more popular than any social network, advertising, etc. combined. And it's been steadily growing long after the Kickstarter project ended 2 years ago. Super fun.2. A bigger project means buying materials in bulk. That expensive paper that isn't affordable when buy 100, is super cheap when you buy 4,000. Same for shipping materials, storage, etc. Volume discounts and economies of scale are hugely beneficial, so seek out any volume discounts you can from your suppliers, partners, etc.3. INVEST IN YOUR BUSINESS. You had a project explode, don't let that be your one success. Whatever equipment you've been dying to acquire. Whatever location you want to move into, whatever resources were not possible prior to project, now are. Don't spend a single cent of project money on anything wasteful (okay, maybe a little). Use your savings on resources that will allow you to continue your creativity. My ACME Poster project allowed me to pay for my first entire year of rent on a new workshop. I bought a bunch of woodworking tools, poster storage, even a laser cutter that I now use to produce fun wood projects in my store: https://fringefocus.com/store/housewares/4. Respect. Whether you feel you have earned it or not, a hugely successful projects screams to the world "Hey, I am capable of kind of cool things that people generally kinda like." or even "This person is good at some stuff!". This means you can reach out the media, new bloggers, potential employers (if that's your thing) with some recognition that you can tackle tough problems / big projects. A lot of the attention I get on current projects probably stems from people knowing I successfully completed a big project on a public stage (Kickstarter). You aren't a stranger anymore. :)5. Straight up happiness. People would email me from all over the world just saying how psyched they were by my project, or how much they loved my work. It was (and continues to be) unreal. That kind of positive feedback makes all this hard work worth it, and makes every day a little more fun (knowing a large number of people are happy with what you've made). It's just fun.I could write a lot more, so ask away! I should add that hiring help (ideally in-house with you) for fulfillment is a very good move. As is researching the hell out of postage, postage weights, and best practices. Please feel free to reach out to me at https://fringefocus.com or on Twitter http://twitter.com/fringefocus anytime if you have specific questions about what to do. Thanks! - Rob Loukotka | Fringe Focus Inc. | Chicago
Rob Loukotka

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