This is how much a Kickstarter would cost you.
January 2, 2015 5:57 PM   Subscribe

Some breakdowns and analyses of earnings and costs from Kickstarter: Oh Joy Sex Toy (This particular page might be SFW, but most of the site isn't), Fate Core, Video Game High School Season 1 and Season 2, Corporate America. The overall sentiment seems to be that Kickstarters cost more money than assumed, though some disagree on the usefulness of budget breakdowns.
posted by divabat (40 comments total) 24 users marked this as a favorite
 
I think the first link is a link of "what not to do when you have a low-level kickstarter".

2,000 copies of a book, and you spend $13,000 for a "book designer" and "guest artists"? Sounds about right...
posted by hal_c_on at 6:27 PM on January 2, 2015


The overall sentiment seems to be that Kickstarters cost more money than assumed

It totally is safe to say that nearly all projects of any kind are more difficult and expensive than they might initially seem. But I don't see much here that's specific to Kickstarter. The Kickstarter and Amazon fees aren't a surprise to anyone, that's for sure.

Fate Core's writeup says:

As it is, I’d rate this as a very approximated break-even, with our actual profit-taking to come in the sales of the product line outside of the Kickstarter campaign. Which, at the end of the day, is pretty much as designed and intended.

Kickstarter certainly does have their own fees, but probably the biggest "cost" is that it takes an incredible amount of time to communicate with thousands of individual backers, which you don't have to do if you use a more conventional funding source. But these are all documenting money costs not time costs.

The "some disagree on the usefulness of budget breakdowns" link isn't even talking about postmortem budget breakdowns; they're talking about planned budgets for projects still trying to attract backers. Which is a totally different question.

It's easy for folks to just see a big number and think "oh shit that's a lot of money you must be rich now" so I think to some extent these write-ups are done to say "no really, the money you gave us really did go towards the project".
posted by aubilenon at 6:33 PM on January 2, 2015 [2 favorites]


OJST's shipping costs were $15 per book? What? I mean, sure they went with DHL which I'm sure is really nice but USPS media mail anywhere in the US would be about 3 dollars.
posted by RustyBrooks at 6:35 PM on January 2, 2015 [4 favorites]


If they saved $10/book that would be $30,000 dollars they'd have now. Surely I must be misunderstanding something.
posted by RustyBrooks at 6:38 PM on January 2, 2015 [2 favorites]


I think it should go without saying that a certain percentage of the proceeds go into the pocket of the person doing the work. They are effectively working on a salary and anything they make off of sales on top of that is a "bonus". I guess there are people who feel offended that people make any money off of a kickstarter, but I wonder why. Don't the artists also need to pay rent off of their work, hence the whole purpose of raising money in the first place? As long as they pay their taxes on their income, who has a right to feel offended in the first place?
posted by surazal at 6:38 PM on January 2, 2015 [5 favorites]


This particular page is SFW

O_o The sidebars contain a number of NSFW silhouettes, my page came up with a rotating ad that contained full (cartoon) frontal. YMMV.
posted by Ogre Lawless at 6:39 PM on January 2, 2015 [3 favorites]


OJST's shipping costs were $15 per book? What?

That's total per book paid to the fulfillment company. It includes overhead for packaging etc.
posted by wemayfreeze at 6:40 PM on January 2, 2015


This doesn't seem outrageous to me. They made 10K profit. That's money. I would take 10K. Did they imagine it would all be profit? I mean it's strange to say "We made a kickstarter to make these books and then we it turned out we needed to use a bunch of the money to make the books."
posted by If only I had a penguin... at 6:40 PM on January 2, 2015 [9 favorites]


Paid to the company for packaging and shipping? Man. I just don't know. That would be a place I would skimp on.
posted by RustyBrooks at 6:41 PM on January 2, 2015 [1 favorite]


People here seem to be under the impression that OJST was unhappy with the results of their Kickstarter campaign. They aren't — they are very happy!
So what does this all mean? Well it means we love Kickstarter, and so should you! We got our books, our fans got theirs, and we got paid!
posted by wemayfreeze at 6:43 PM on January 2, 2015 [4 favorites]


That would be a place I would skimp on.
That's been pretty consistently where physical-product Kickstarters run into trouble, from what I've seen. Doubly so when international shipping comes into play. Any real fluctuation in shipping costs, international costs, or packaging costs (you really don't want to run into trouble on a packaging return rate), and it'll eat any margins you built in alive.
posted by CrystalDave at 6:44 PM on January 2, 2015 [7 favorites]


it'll eat any margins you built in alive

If they ended up with $10k on the sale of about 1500 books (if I read that right - they still have more books they can sell) then they made $6.66/book. If they could save even $10 per book on shipping - and it sounds like they could have - then they'd have soooooo much room for swallowing losses. They'd make 2.5x the money.

They're not shipping oddly sized/shaped or delicate things. I've shipped hundreds of books personally (long time dedicated bookmooch member) with no losses or damage that I know of. I packaged them myself (brown paper) and printed labels automatically using paypal. The total time to get a book ready for shipping was probably 5 minutes and I bet I could get it down to 2 if I was doing several. If I sprung for book boxes you could probably do them in under 60 seconds each.

We're talking about a few thousand books here. 2000 books times 2 minutes is 66 hours, netting them $300/hour to ship their own books.

The international stuff, I dunno. I don't know anything about that. Maybe that's a bigger problem than I think it is.

Here's my armchair quarterback opinion: I think they wanted to do it like Real Book Makers and so they paid a fulfilment service. I've seen this before in some bespoke manufacturing stuff - doing something the way the Big Boys do it even though you're a small fry. But the big boys don't pay what you have to pay (if you think amazon is paying $15/book to ship stuff....)
posted by RustyBrooks at 6:51 PM on January 2, 2015 [3 favorites]


I know I have mentioned it before, but I am an academic who studies Kickstarter. This rings true generally.

When we surveyed successful projects, we found that money was the fourth most important reason why people launched campaigns. Getting press attention, judging demand, and building community was important.

However, 91% of larger Kickstarter projects turn into ongoing businesses, so this does seem a good way to get started. People rarely made a large profit, but going over budget was rare too.

On the other hand, 75% of projects were delayed, with larger projects being more delayed.

Overall, to be successful, you use Kickstarter to, well, kickstart a new venture or idea, it is a step to getting resources, proving demand, and learnings about a business. Almost everyone encounters unexpected problems, but that isn't suprising.
posted by blahblahblah at 6:56 PM on January 2, 2015 [26 favorites]


Nothing, but nothing, ensures Kickstarter failure like overconfidence about costs.
posted by Artw at 6:56 PM on January 2, 2015 [6 favorites]


As a data point, shipping and handling on a single book from the US to Canada by usps/Canada post routinely exceeds $15. I had a couple sent up this Christmas by small secondhand dealers. Some were more than twice that.
posted by bonehead at 6:56 PM on January 2, 2015 [3 favorites]


Slowly building up to a Kickstarter planned for a little later this year now (which also involves shipping physical books), so thanks for this for inspiration/insight...
posted by saulgoodman at 6:57 PM on January 2, 2015 [2 favorites]


The international stuff, I dunno. I don't know anything about that. Maybe that's a bigger problem than I think it is.

That it is.
posted by divabat at 7:14 PM on January 2, 2015 [5 favorites]


I ran a Kickstarter for a video game earlier this year and we pulled in $150k. We're working on a series of documents to really break those numbers down, but here's a quick back of the envelope:

We spent about 6k doing events in the run-up to the Kickstarter. This was by far our biggest prep expense, but it ensured that we had a big first day and really, really paid off. Having a mailing list of excited diehards gave us big word of mouth and we closed close to $30k on day one.

We spent about 4 months, unpaid and full-time, creating content for the trailer. The music came from Power Up Audio who agreed to do it gratis so long as we'd agree to use them for the rest of the game.

We lost about 8.6% to fees- 5% to Kickstarter, 3.6% to Amazon for payment processing

We kept our reward manufacturing & shipping costs very, very tight- They most expensive tier's rewards account for about 8% of the total, not counting labor time to manufacture the assets for things like the artbook. The good news is that any labor cost is likely to be offset by the fact that our amazing print partner is a Hogwarts-ian magical world where everything is cheaper then we expected.

We'll lose another undetermined chunk to taxes. For our purposes, the pledges count as income and will be taxed accordingly.

_______

If there's a takeaway from all that its that Kickstarter has become so competitive that if you don't have lots and lots of time and between 5 and 10k to, well, Kickstart your Kickstarter, it can be extremely difficult to fund.
posted by GilloD at 7:17 PM on January 2, 2015 [13 favorites]


Oh yeah, people I interviewed also suggested using services like Backerkit to make managing logistics easier.
posted by blahblahblah at 7:18 PM on January 2, 2015 [2 favorites]


I've kickstarted somewhere like 100 projects. I've been disappointed maybe twice. However, I'm a lot less frequent user these days. The hurdle of getting me interested has gotten a bit higher.

blahblah, I'm glad to see that most successful kickstarters lead to businesses.
posted by DigDoug at 7:29 PM on January 2, 2015 [1 favorite]


Would they have been better off putting the $10,000 towards additional marketing efforts instead of banking it as profit?
posted by humanfont at 7:32 PM on January 2, 2015


Between supplies and labor, plus trying to average domestic and international shipping costs, replacing missing packages and trying to get items in a reasonable timeframe, $15 sounds completly within normal range for shipping a book.
posted by HMSSM at 7:56 PM on January 2, 2015


If there's a takeaway from all that its that Kickstarter has become so competitive that if you don't have lots and lots of time and between 5 and 10k to, well, Kickstart your Kickstarter, it can be extremely difficult to fund.

I would love to see that kickstarter: trying to raise 5$k to properly fund a good kickstarter video... Have some poorly dressed guy with bad lighting, bad sound speak directly into his webcam or whatever and explain that the 5k will go to production quality kickstarter video to raise money for his project... Successful backers could get behind-the scenes access to the making of the kickstarter video, first sketches for the product logo they need to create, etc, etc...
posted by el io at 8:15 PM on January 2, 2015 [17 favorites]


I've done two small comics Kickstarters. OJST's numbers seem about in line with my experience, except for that $15/book to package and ship it. They need to find a new fulfillment house for the next one who can ship stuff media mail. Unless maybe the book was only available as a big hardcover tome or something, I dunno.

hal_c_on > 2,000 copies of a book, and you spend $13,000 for a "book designer" and "guest artists"? Sounds about right...

Actually, yes. Let me give you some of the assumptions behind this:

Erika subscribes to the idea that you Must Update On Schedule*. So if she is going to spend four weeks of her life making the video, worrying about the campaign**, and doing whatever other tasks she needs to do to go from 'a bunch of files on her hard drive' to 'books in the hands of backers' she needs to hire someone to cover for her. So that's about $2k according to the article.

In addition, there were other guest strips included in the book. She had already paid for these, but felt she should have paid more for them. So a certain chunk of the profits were earmarked for them.

And of course putting a book together takes time, skill, and money. You have to learn how to wrangle InDesign, and you have to have an eye for layout. A cartoonist already has a certain kind of eye for layout, but this is a different kind of layout - "graphic design" versus "illustration". I personally blew a couple of weeks on my first book learning the basics of InDesign and figuring out how to use its automated processes; with $69k in her pocket, Erika chose to pay someone $5.5k to do this instead. I'm not familiar with the rates for this kind of thing, so I don't know if that's a lot or not. This is, however, a pretty specialized task, and I made a mistake in putting together my second book that made me have to toss an entire print run and pretty much all the profits from my campaign. If the graphic designer has made those sort of mistakes already and knows how to prevent them, she has earned her pay IMHO.

I also concur with the conclusion of "we're doing less stuff next time". Every single tchotchke you add is one more damn thing you have to source, manufacture, and ship, and all of those steps take time and/or money. Time you could be spending drawing the next comic book, or whatever it is you're making.

* Personally I think this is unnecessary in this day and age of a zillion ways for people to get told when an update happens, but it's the received wisdom from all the pioneers who grew their audience in the days before rss/facebook/twitter/other ways to subscribe to a comic.
** trust me, Worrying About Your Kickstarter is going to become a significant part of your day for the duration it's running.
posted by egypturnash at 8:19 PM on January 2, 2015 [16 favorites]


Erika subscribes to the idea that you Must Update On Schedule*. So if she is going to spend four weeks of her life making the video, worrying about the campaign**, and doing whatever other tasks she needs to do ... she needs to hire someone to cover for her. So that's about $2k according to the article.

Well she would see a drop in traffic during a hiatus. Assuming she's making an half-decent living from the site, that could easily be more than $2k in lost revenue. It's just a slightly less direct form of her paying for the time she's spending on the KS crap; instead of paying herself, she's paying other people to do the stuff she'd otherwise do.

(I think I do agree with her decision though: In addition to the traffic drop, a month long hiatus would erode her reader base at least a little. OTOH, using guest artists gives her site a extra boost, since artists usually put a link on their own site to their guest work on other folks' sites.)
posted by aubilenon at 9:03 PM on January 2, 2015


Also, they're sharing these posts on Patreon, which is extra income.
posted by divabat at 9:52 PM on January 2, 2015


It seems odd to say this, but it's really great to see folks factoring in the amount it takes to pay themselves for the time they spent! Don't work for free - even for yourself!
posted by sevensixfive at 10:26 PM on January 2, 2015 [7 favorites]


Yeah, count me in the slightly-confused-by-the-crowd crowd. Seems to me they budgeted things correctly, factored in professional assistance where needed, produced, delivered, and had a little left over -- which is sort of what you want to do, isn't it? Congratulations to the OJST team and what they've accomplished, and kudos to understanding how to do a Kickstarter right.

And he does say that doing fulfillment themselves next time is an option, which it really wasn't in terms of availability for this one. So maybe they'll be able to shave some of those numbers down.

But on the whole I think creating a quality product and properly funding it using the KS is evidence they know more about what they're doing than the average internet commenter.
posted by dhartung at 11:15 PM on January 2, 2015 [7 favorites]


i backed the ojst book on kickstarter and it really is a very well done book. i also have her dar books and the difference between the quality (of materials, not content) is immediately evident.

as far as cost for guest artists, that was part of the stretch goals - the more money raised the more each guest artist got. i personally loved that. she made very clear paying those contributors well was important to her.
posted by nadawi at 11:16 PM on January 2, 2015 [6 favorites]


75% of projects were delayed, with larger projects being more delayed

Maybe it's just because I work in an old school kind of place, but for some of the dollar amounts a lot of Kickstarters are asking for, I'd think "project management" would be on their list of expenses somewhere.
posted by backseatpilot at 5:25 AM on January 3, 2015 [1 favorite]


From the way they describe it, they got $23 / hour, which doesn't sound that shabby for their time.

The financial risk is debatable - there was no reason not to get the books made, even if they didn't kickstart it - they know that they can sell books, on the internet, at conventions etc. Doing it via Kickstarter allowed them to gauge the market with some degree of safety, it reduced the risk.

It also sounded that if they were being more mercenary then yes, they could have made a lot more profit. That's their decision to make, a risk they chose to take on.
posted by YAMWAK at 6:52 AM on January 3, 2015


I would rate comics and RPGs as the most likely to succeed types of Kickstarters - probably because of established creative communities used to going it alone and doing things like sorting out printing and PDF copies on their own, also because the nature of the product is usually just that - a printed item or an electronic version of the same.

Anything that involves manufacture of a unique or complicated item is probably the most doomed, between them in the spectrum lie film projects, music projects and videogame projects, all of which seem to be probe to dragging off to infinity without producing much - for film and videogames I think it is because they are complex endeavors organizationally, for music projects I guess becaue musicians are involved.
posted by Artw at 7:43 AM on January 3, 2015


Back in the day I did a lot of ebaying and packing and posting used to take a crazy amount of time and effort even when I got super efficient at it. I could totally see using some service to do this especially if your time was better spent elsewhere on other projects / work
posted by fearfulsymmetry at 7:53 AM on January 3, 2015 [1 favorite]


I would rate comics and RPGs as the most likely to succeed types of Kickstarters

I've heard art / photography projects that are basically 'I've got these pictures / images and want to do a book' do well... those that are 'I have this idea for a book but I need x cash for equipment / travel / living expenses'... go not so well.

I think the lesson for the board game guy (and others) is to work out both you fixed and per unit your costs properly beforehand and put in a big enough buffer for any problems. Setting you kickstarter target too low is just dooming yourself.
posted by fearfulsymmetry at 8:08 AM on January 3, 2015 [1 favorite]


Back in the day I did a lot of ebaying and packing and posting used to take a crazy amount of time and effort even when I got super efficient at it. I could totally see using some service to do this especially if your time was better spent elsewhere on other projects / work

I remember hearing Roman Mars talk about how on the first 99% Invisible Kickstarter (maybe the first two?) they did the fulfillment themselves and it almost killed them. IIRC, they decided that paying to have someone else do the fulfillment was well, well worth the price.
posted by Lexica at 9:29 AM on January 3, 2015


erika moen also does her own fulfillment for some things. for instance, here she is packing up the shipment of dar books that my order was included in and here she is taking them to the post office. it seems to make sense for the amount of orders, and amount of other things she had to do for those orders like all the doodling and signing, that she'd hire that work out for this project.

but really, i'll say it again - if you like pretty books and enjoy the webcomic, buy the book. it's really well done and a joy to flip through.
posted by nadawi at 9:40 AM on January 3, 2015


I think pro fulfillment is a perfectly legit decision for people, especially if they have no particular expertise or business interest in building that expertise. But I do wonder if there are vendors who have sprung up expressly to service the KS crowd at rates that might not be as competitive if they were marketing to more experienced people. $15 doesn't seem way out of line with a fairly small run, but if that's $1 higher than what you could get from the average fulfillment house, that's a 7% difference, which is a really solid bump in the vendor's margin (or pretty solid hit to your budget). If your numbers shake out and you are happy with the results, I'm not going to lecture on people paying premium rates for services (because that's how I market myself and I have to feel like it's a goes around/comes around principle) if they can afford it. But if your budgets are tighter, my gut tells me that people should shop around a little wider than the places 'everyone goes' for certain KS support services.
posted by 99_ at 12:29 PM on January 3, 2015


i'd find it strange if ojst fell into some kickstarter specific overinflated rates fulfillment business since she's been selling in the physical space on other projects for quite a while and she seems very plugged in to the community of online comics.
posted by nadawi at 12:39 PM on January 3, 2015 [1 favorite]


The international stuff, I dunno. I don't know anything about that. Maybe that's a bigger problem than I think it is.

That it is.


Yeah, I send a lot of books and book-sized items overseas, and it would be a massive pain to do yourself if only for the fact that you have to fill out a customs form for every package. Then the clerk at the post office has to go through each individual customs form, type the details into the computer, and calculate postage while you wait. If even 50 of the 1300ish books they sent out were international... that's a lot of customs forms.

I notice some Kickstarter projects have separate, slightly more expensive tiers for international shipping, which I think is a good idea.
posted by retrograde at 10:21 PM on January 3, 2015


I notice some Kickstarter projects have separate, slightly more expensive tiers for international shipping, which I think is a good idea.

Actually, in one of the few good changes Kickstarter has implemented recently, they added the ability to configure each tier with per-region shipping prices. So, you can have a tier for $20 that grants people a book, and then when a backer selects it, they identify their country/region, which Kickstarter uses to automatically add in appropriate shipping costs. You can be as specific as you want (E.g. you can just have 1 price, or you can specify as many countries as you want with their own prices, and let the rest fall into a general "Other").

This is a massive plus for the tabletop games segment of Kickstarter, as the unpredictability of international shipping has been a major hindrance. Nobody wants to have 10 different pledge levels that differ only in shipping region, and nobody wants to have to collect shipping after the fact. However, the cost to ship to Canada, versus Western Europe, versus Eastern Europe, etc, is highly variable. As a result, planning projects and pricing shipping appropriately for international backers was some ridiculous (and risky) math.

The one change that they still haven't made, which I think they really need to, is to stop counting shipping towards a project's goal. Because of the variability of shipping, counting it towards the goal means you could technically reach your goal, but find out that you don't have the money you need because a higher percentage needs to go to shipping than you'd thought (due to getting a lot more international backers). For projects with physical rewards, this can easily be the difference between a successful fulfillment, and either not fulfilling (less likely) or fulfilling, but losing money on the project as a whole (more likely).
posted by tocts at 5:56 AM on January 5, 2015


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