HERE ARE THE SIX THINGS THAT YOU NEED TO KNOW:
Kickstarter has become a very cool option for lots of Amazon sellers. From Oculus Rift to potato salad, sellers have raised millions of dollars for their kickstarter projects.
For those of you who have not explored kickstarter, it is a website that is used by product inventors and developers to gain access to people who, for the most part, want to pre-order your product at a significant discount.
As an Amazon seller, Kickstarter offers a great many benefits for your next product. Here are the 6 things that you need to know:
- What is KickStarter? KickStarter is an on-line platform that matches people who want to develop products with people who are interested in pre-purchasing the product at a significant discount or are given some other benefit. It works well for new designs as well as new twists on old designs. Since the beginning of KickStarter, 115,000 projects have been funded. About 38% of those that post their project on KickStarter get funded. Funding means that you have attained your funding goal. If you do not reach your goal, you do not get the funds that have been previously pledged to you.
- Who Can Use KickStarter? KickStarter is used for projects that have a clear end. You can’t put up your Amazon Store as a KickStarter project, but you can launch a product. It must fit into one of fifteen categories: Art, Comics, Crafts, Dance, Design, Fashion, Film, Food, Games, Journalism, Music, Photography, Publishing, Technology or Theater. You can market projects from US, UK, Canada, Australia, New Zealand, the Netherlands, Denmark, Ireland, Norway, Sweden, Germany, France, Spain, Italy, Austria, Belgium, Switzerland, Luxembourg, Hong Kong and Singapore.
- What is involved in creating a KickStarter Campaign? A Campaign has most of the components of an Amazon Listing, but, in addition to what you can use for your Amazon Listing, you will need to have the following.
- VIDEO: The first is the Video. While not required, almost all successful campaigns have a good one. This video should explain the need for the product, who will use the product, what the product looks like, what stage of development is it in and why the product is the greatest thing ever.
- REWARD: The listings generally have a “reward” that is the tangible item. For example, if you are trying to develop a market for a new pogo stick design, you should create a campaign that has price points that allow you to give them one with each pledge. Generally, the offer should be a really good one. For example, if the list price is $100, you may want to offer them your product with a $60 pledge. For $100 or more, you would get two, and so on.
- GOAL: This is how much money that you want to raise. Generally, you want to keep the goal pretty low. Keep in mind that if you have commitments for 95% ($4,750) of your campaign for $5,000, then you will receive nothing. If you received that same amount for a $3,000 Campaign, you would get it all. So choose a campaign that you are confident that you can reach. There is no penalty for going over, so generally, go conservative. Don’t get too carried away though, after the goal is reached, some investors may not consider an offer that is way more than fully subscribed.
- TimeLine: You have to set the length of your campaign. Campaigns can last from 1–60 days.
- Risks and Challenges: You must provide a section that outlines all that could go wrong. From customs to manufacturing challenges, you must disclose in your listing the risks and perils involved in making this idea a reality.
- How much do I make? Generally speaking, you should figure out all of the costs of the campaign. Here is a breakdown of one person’s product that was successful on KickStarter (it was for a coffee table book)
Total Raise: $25,161
Fee to KickStarter and Proc. Fee $ 2,534
Product Costs, Incl. Shipping $16,499
Video Production Costs $ 155
Net Profit: $ 5,973
5. Why should I do it? Well, first there is the $5,973 left over after all of the costs. But additionally, there are a number of intangible reasons that it might be beneficial:
- It raises awareness. This product will be previewed by thousands of people. In addition to those that want to become part of the launch, there are also many who have become familiar with your product.
- It adds validity to your product. “Funded on KickStarter” on your listing provides a certain validity to your new product. Clearly if this was popular on KickStarter, it must be a good, well made product.
- It is a good test for customer acceptance. You have validated its acceptance as well as tested a price point.
- NEW AND IMPROVED: THEY WILL REVIEW IT FOR YOU!!!!!!!! With the new review guidelines that Amazon has posted recently, this is a goldmine for reviews. These people are invested into the product and want it to succeed. You have all of their contact information. If you have kept them informed and shipped a good product, you can kiss your review worries goodbye as they will be your first reviewers. And they will probably give you higher reviews than other sources, since they have been with you for such a long time. This, in my opinion, is the NUMBER 1 reason to consider KickStarter for your next project.:
6. Your Competition is Doing it: Amazon is a big fan of KickStarter products. They have a separate section that showcases these products. Many, if not most, are exclusive to Amazon. Remember that Amazon wants a fantastic customer experience and having unique products is one facet of the experience. There are about 650 products in the KickStarter showcase on Amazon. They range from Books to a combination cooler/blender. (read the reviews on the cooler/blender on things not to do)
So that is what KickStarter is all about. If you are considering it, try speaking with some consultants who put together kickstarter campaigns, or contact other suppliers who have already been through the process.
Before you get started. One of the things that I constantly tell my clients is the need for an email list. This is one of the reasons why. Generally, just placing the product on KickStarter, doesn’t mean that the money will come flooding in. Just like on Amazon, you have to work to make it happen. Alert all contacts that you have. Post it on your personal social media pages. Get people to share it. Success in these programs generally happen within the first 48 hours. If potential investors see you raking in money, they will take a look at it to see why everyone is investing. If you have a mailing list of a couple of thousand previous buyers, then it makes it so much easier.
Give it a shot! You may find that you can hit the ground running with the momentum provided by a successful KickStarter Campaign