Ultimately, the goal of any crowdfunding project is to raise money and fund a business. Here are a few reasons why Pledgecamp is the superior choice for creators to save on costs and earn more profits. #FeatureFriday
1. Lower Platform Fees
- The more creators set aside for Backer Insurance, the lower the project listing fee will be.
- Other platforms take usually 5% of total funds raised. On Pledgecamp, creators pay as little as 0% by offering 50% as Backer Insurance, or up to 5% if no Backer Insurance is offered.
- Creators keep more of the funds they raise, while backers receive protection and a way to keep creators financially accountable. Win-win.
2. Lower Transactional Costs
- Credit card fees are typically 2.9% + $0.30 per transaction. Adding the 5% platform fees listed above, crowdfunding creators on today’s platforms lose around 8% of their total raise immediately to fees.
- Funds collected on the blockchain as PLG (Pledge Coins) involve negligible fees. Fast transaction time is also a non-issue as crowdfunding campaigns collect funds over a period of up to 60 days. As adoption of PLG increases over time, savings for creators will continue to go up.
- No foreign exchange is required when using PLG. With PLG, more markets can participate without currency limitations, which multiplies the projected market size for each project.
- There are no failed credit card attempts or chargebacks when using PLG (historically, around 5% of funds raised). Oftentimes, the problem is simply from backers who forget to update expiration dates or lost a card and forgot to update it. Creators who see that a backer has backed the project with PLG can be sure the transaction will go through successfully.
3. Robust Backer Management Software Included
- Pledgecamp includes a robust backer management system for surveying backer information, segmenting groups, tracking shipping status, refunding, and more.
- Currently, most creators use a service called BackerKit which charges an additional 3% of total funds raised. Pledgecamp includes all of this for free.
- This level of software is not included in Kickstarter or Indiegogo but is absolutely essential for creators who are shipping physical products, especially when a project is complicated with multiple item types, or size or color variations, or many countries to ship to.
4. Superior Software Tools
- In addition to the basics, Pledgecamp offers advanced campaign analytics, Facebook pixel integration, referral sale codes, advanced shipping tables with bundles, and more.
- As four-time crowdfunding creators ourselves (in addition to the numerous other campaigns we were hired to help with), we designed in all of the tools that were essential to our success, but were only available as third party add-ons to Kickstarter or Indiegogo.
- For example, to track referral sales involved creating our own custom solution or hiring a service, which cost us 3% of all referral sales. On Pledgecamp the service will be free.
- A major additional feature is the ability to open “Storefronts.” These Storefronts will allow creators to use their Pledgecamp project page and continue to accept pre-sales after the crowdfunding campaign is over. Typically, this is a big pain and cost for creators who don’t know how to set up their own website and payment processor for “life after Kickstarter”.
Embracing blockchain technology and using our crowdfunding experience to build a simply better-designed product allows us to help save creators money by getting rid of the inefficient costs.
Add up the traditional listing fee (5%) + credit card fee (3%)+ rejected cards/chargebacks (5%) + backer management software (3%) + referral service fee (3% of referred sales) = more than 16% of your campaign’s funds out the door after it ends.
In our experience running campaigns, this is an entirely realistic budget of costs. It is what we budgeted for ourselves and for clients who were unaware that they would instantly lose a large chunk of what they worked so hard to earn.
Our goal is to create a system that removes most of, if not all, the inefficient fees and ultimately saves creators money. Embracing blockchain and better design is the first step to do so.
For more details about the Pledgecamp platform, refer to our white paper accessible at https://pledgecamp.com/whitepaper.
This post may contain forward-looking statements about the future functionality of the platform. The platform is currently in development, and we reserve the right to make changes to the design, names, or functionality of features in the interests of making the platform successful. For full risk factors, see white paper.