My project was successfully funded on 9 November 2013 to the tune of $64,597. That’s a hefty sum of money raised by some very generous (and most amazing) backers. Yet, five months later, after a significant typo and the last reward finally shipped, I had hardly broken even.
Where’d it all go?
That’s the money question. Literally. The answer is a little complex, but I’ll break down the numbers and share a few things learned along the way.
TOTAL FUNDS RAISED: USD $64,597
My campaign goal was $10,000. These funds were meant to cover the cost of printing. In reality, I had hoped to raise far more than that to the recoup costs (time, money, and equipment) for three years of on/off work before the campaign had ever launched.
Indeed, I raised far more than my goal. But…
Less Kickstarter’s 5% fee ($3,230) = $61,367
If a project is successfully funded, Kickstarter applies a 5% fee to the funds collected. This is an important point, as some backers’ credit cards simply fail to authorize, so you might actually collect less than the amount raised.
Less merchant’s ~5% fee ($3,068) = $58,299
Pledges from US backers are processed by Amazon Payments, while pledges from non-US backers go through a third-party payments processor. These fees work out to be roughly 3–5%.
Less video production ($1,000) = $57,299
I produced my campaign video entirely, and I needed music and additional stock footage to supplement my own footage. Licensing cost for these items was approximately $1,000.
Less loan repayment ($15,000) = $42,299
I accrued a significant amount of expenses during the research and design phases of my project. Multiple trips to Brooklyn, font licensing, camera equipment, and so forth. This money was repaid immediately after funding was successful.
Less printing ($10,000) = $32,299
Printing was precisely what I estimated it would be: $9,500 to Bjorn Press in Provo, Utah, and $500 to cover my travel expenses for proofing.
So far, so good. Still have $30K in reserves. Oh wait.
Less shipping supplies ($5,811) = $26,488
To ship the 24"x16" posters, I use U-Line shipping tubes that cost me about $4 per tube. These tubes are extra wide (6 in.) to minimize curling of the print. Other supplies included tape, labels, and bubble wrap to protect the ends during shipment, and kraft envelopes for the booklet (mentioned later).
Less storage lease for 5 months ($690) = $25,798
I purchased 1,000 tubes to get the best price possible, and storing those tubes (measuring 6"x24" each) was quite a challenge. A 10'x20' storage unit, located about 1 mile from my office, afforded the room I needed.
Less postage ($4,701) = $21,097
I ship all of my packages via USPS Priority Mail, as it’s the most affordable option for a package of this size. Shipments to the U.S. run between $6 and $9, while shipments outside the U.S. run between $35 and $49. A portion of the shipping costs were funded by Kickstarter backers.
Less temporary help ($741) = $20,356
I brought Tim on board to help expedite some of the reward shipments prior to Christmas. He was a champ to work with.
Less charity: water contribution ($2,000) = $18,356
One of my reward tiers offered an exclusive poster signed by Kristian Roebling (direct descendent of the Brooklyn Bridge chief engineer), Brooklyn/NYC artists Jonathan Hoefler and Tina Roth Eisenberg (Swissmiss), and charity: water founder Scott Harrison. The full amount of each pledge ($400) was donated to charity: water, something I had decided on long before the campaign launched. I’ve been a supporter of charity: water for several years, and I’m always looking for ways to contribute.
However, Kickstarter’s guidelines prevented me from mentioning the donation in the reward, but I had committed to it nonetheless and followed through.
Less booklet printing ($3,360) = $14,996
During the second week of my Kickstarter campaign, I promised a behind-the-scenes booklet if we surpassed a stretch goal of $60,000. We surpassed it, and I delivered on my promise. View photos of the booklet or purchase a copy.
Less poster reprinting ($3,958) = $11,038
Late Christmas Eve, John Phillips, a Kickstarter backer, sent me this note via email:
“My Brooklyn Bridge poster just arrived and I love it! I did notice that the spelling of ‘Brooklyn’ was wrong on mine. Not sure if this has come up before?”
I thought he was joking. To my amazement and horror, he was not.
Apparently the typo had been in the artwork nearly since day one, as the title is one of the ﬁrst things I add when starting a new piece—it’s usually the easiest thing to ﬁgure out.
Hundreds of times I had looked at the artwork and never noticed it. I even kerned the title’s characters by hand on more than one occasion and didn’t pick up on it.
Thankfully, many of the 587 Kickstarter backers—a majority of which had already received their poster with the typo—took the news remarkably well. Their positive encouragement kept my spirits high in what would have otherwise been a disastrous situation.
After much contemplation, I chose to give backers the opportunity to return their poster for a corrected version or keep the copy they had. Many of them chose to keep the typo version. None of the shipped (or returned) copies with the typo were destroyed and are included in the 1,500 copies of the poster that are available.
Less postage, again ($3,115) = $7,923
Shipments of corrected posters to selected backers, as well as booklets (whose printing was delayed due to the typo) mailed to all backers, cost me another $3K.
Less income taxes (about $3,000*) = ~$4,923
Ah, lest we forget the government’s role in every Kickstarter project that originates from the United States. I had expensed many of the funds deposited into my bank account before the year expired, so I owed taxes only on what I netted.
However, had I deposited the full balance in, say, December and then incurred expenses for the project in the new year, I would have had to pay taxes on the entire balance.
Word to the wise if launching your campaign near the end of the year: Don’t. Unless you can incur most of your expenses before December 31. Otherwise you’ll pay taxes on whatever amount transfers from Amazon Payments to your bank account prior to December 31, even if you expense all of it on January 1.
*Because this project is lumped in with all of my other Cameron Moll LLC income and expenses, it’s difficult to pinpoint precisely how much was paid in taxes. My accountant handled that for me.
TOTAL NET PROFIT = ~$4,923
Had someone told me I would have netted less than $5K in my pocket after raising more than $60K, I wouldn’t have believed it for a second.
Profitability of 7.6% is a tough figure to swallow when you recognize that I didn’t draw a “salary” for the time spent on the project in the three years prior to launching my campaign. Had that been factored in, profitability would have been a few tens of thousands in the red.
Thankfully, I have roughly 800 posters remaining from the project, which will be sold at a much higher margin and will (hopefully) allow me to earn a greater profit on the many hours I’ve poured into this project.
Profitability per backer was $8.39.
However, it must be said that, without a doubt, I have the best backers of any Kickstarter project, period. Their support of my work means the world to me, and they were incredibly encouraging throughout the typo issue. I couldn’t have asked for better crowdfunders.