There’re numerous issues with any investment opportunity that you pursue. With bank loans, you have to be sure to pay back the loan or face bankruptcy. Crowdfunding almost seems risk-free when compared to this. There is neither anyone vying for control of your business nor do you have to pay back any money. However, fulfillment problems do arise when it comes to satisfying the contributors. Handling these problems the wrong way can be harmful to your business and reputation. Continue reading to discover 7 common crowdfunding fulfillment problems and ways to avoid them ahead of time of solve them.
Promising Too Much
Popular crowdfunding platforms like Kickstarter have attracted tons of creators who want to introduce the world to amazing new products. The issue is sometimes, the features they promise are too good to be true. As a creator, make sure you promise what you know you can do, instead of having to explain to backers why you can’t later. As a general rule, start with something simple that you know you can produce. If your project is successful and you start growing your capital, you can always test later to see if you can add new features and launch a newer and better version of the product.
International Shipping Issues
Figuring out how to include the cost of international shipping in your crowdfunding campaign can be frustrating. And if it isn’t done properly, it can cripple your chances of success. Crowdfunding platforms usually give you the option to ship within your country only or to ship anywhere in the world. However, shipping anywhere in the world can be expensive and time-consuming. Getting it right, depends on the amount of experience you have and your willingness to search for the right option for you. Research reward fulfillment companies and e-commerce services to find the best option for you.
Forgetting To Calculate Costs For Packaging And Postage
Cost isn’t the only problem for international shipping. You need to consider the cost of packaging and shipping all of your rewards. Understanding how to calculate these costs and rounding your estimates up if you are unsure can help you make sure that you don’t run short on your budget for fulfillment. The first step in this process is finding out how much your packaging is going to cost. Once you know that, you can use online solutions to calculate the postage. Remember to figure out average costs for different countries if you are doing international shipping.
Unexpectedly High Demand
For instance, you come to a deal with a manufacturer and your crowdfunding goal is to reach their minimum order quantity. After you launch, your project went viral and your manufacturer can’t handle the demand. Now you’ve to find someone who can. Save yourself from this scenario by planning for it ahead of time and having a backup plan. Having a manufacturing plan before you launch can make you more prepared throughout your campaign. If you see that your demand is going to be higher, you can go to your manufacturer early and try to find a solution before you’re already running late on shipping and need to find an alternative fast.
This problem is about individuals looking to steal your ideas and then fund their projects to beat you to market. Some people look through projects to create and complete theirs before the original or real campaigner does. To avoid this, you need to use private chat areas to discuss projects, and non-disclosure agreements and constantly monitor who is looking at your data and for how long.
Managing Compliance and Accounting Problems
There is a huge amount of doubt when it comes to the accounting rules for funds raised through crowdfunding. Should they be affirmed as an income or as capital? The answer might tend to be different depending on which expert you ask. Furthermore, states in the US will have their own rules on how this money should be taxed. So always seek out a highly qualified expert to advise you.
Offering Too Many Options
Having a variety of rewards for different pledge levels sounds like a great idea, but beware of the migraines it may cause when it comes to fulfilling them all. In addition to your main rewards, dealing with things like t-shirt sizes and other small rewards can set you back more than you think. Having a low pledge option is nice, but it doesn’t always have to come with something. Many just include email newsletters. If you want to include a smaller reward, ensure you include it in your budget and that these rewards aren’t going to take too much time to put together. You want to focus on getting your main rewards out to backers.
That’s it! The above are some common crowdfunding fulfillment problems and how you can avoid them. Crowdfunding is an excellent way to generate funds for your business or project.
It avoids most undesirable problems that can be found with other fundraising projects but it does have its own. By knowing what these problems are, you can reasonably find ways to avoid or solve them, without them costing you later on.
For more information about our crowdfunding fulfillment services, contact us today at Fulfillman. We specialize in picking, packing, and shipping backer rewards and products of different sizes and shapes. Our services are prompt, detailed, and highly reliable. Our dedicated team will be available to speak with you and provide suitable answers to your questions and concerns. When it comes to handling the logistical aspect of your crowdfunding campaign, you can always count on us for outstanding and unparalleled services.