Crowdfunding is an excellent way to break into a new market, test interest in a new product, or build hype around a particular launch campaign. However, with crowdfunding comes the need for high-quality crowdfunding fulfillment services to make sure that the customer experience is an excellent one, and to make sure your campaign is as successful as possible.
If you’re new to using crowdfunding as a source of raising capital, then read on! We’ll talk about what crowdfunding is, who should use crowdfunding fulfillment services, as well as the best way to leverage crowdfunding for the best possible campaign.
What Is Crowdfunding?
If you’re new to crowdfunding, it’s helpful to know what it is. Crowdfunding refers to product campaigns that use multiple, small investors (essentially standard customers), instead of getting a loan from a bank or venture capital for a major project. You’ve likely seen crowdfunding campaigns on social media, usually through channels like Kickstarter or Indiegogo.
Crowdfunding campaigns can have a revenue goal that has to be reached before a product is launched, or they can have tiers of “rewards” for backers to products. These rewards can be anywhere from early-bird discounts, unique products that won’t be offered in standard retail, or any other perk that fits the product or your brand.
You may have associated crowdfunding with smaller operations, but big businesses have been leveraging crowdfunding campaigns for years now. No matter the size of your business, large crowdfunding campaigns need sophisticated crowdfunding fulfillment services to be successful.
Examples of Crowdfunding Sites
There are all kinds of crowdfunding sites, including Kickstarter, Indiegogo, and Patreon, all of which attempt to offer some kind of unique service of focus for crowdfunding campaigns. Kickstarter is the largest platform and is generally used to kickstart the launch of retail products, while Patreon focuses more on on-going contributions, like for webcomic artists or podcasters.
If you’re interested in using crowdfunding, you’ll want to be sure to pick the platform that is the most applicable to your business or services.
Benefits of Crowdfunding Fulfillment
Not sure why you would want to run a crowdfunding campaign using crowdfunding fulfillment services? While the specific benefits will vary depending on the kind of campaign you run and the fulfillment provider you choose, these are general benefits you can expect:
Generally Low Risk
Running a crowdfunding campaign is generally very low risk. You don’t have to put up any capital, and you’re essentially getting “pre-orders” from your backers before the product has ever been made. If you have a revenue threshold for a campaign to succeed, and it doesn’t, you simply return the backer’s money (you don’t lose anything yourself).
Good for Product Testing
If you have a novel product that you think could be a big win but aren’t sure about, then using a crowdfunding strategy could be a great option to gauge interest. If the campaign goes viral, you can confidently move forward with mass production after the campaign is over. If the campaign is a flop, you can look to see why it failed, make product or marketing changes, and potentially try again.
Crowdfund Campaign Can Market Itself
Crowdfunding campaigns have the unique ability to provide free marketing if they are successful. Popular campaigns are often shared by backers, which provides free advertising for your product, and many people will join popular campaigns simply because the campaigns are popular.
The Benefits of Crowdfunding Are Only As Good As Your Fulfillment
Crowdfunding campaigns are generally low risk and good for product testing, as long as you have a fulfillment service that doesn’t ruin the customer experience. It’s very hard to gauge how popular a product is if you get a lot of canceled orders because shipping is taking too long, customers aren’t receiving orders at all, or customers are receiving the wrong products.
Challenges of Crowdfunding Fulfillment
Crowdfunding campaigns and fulfillment also come with a lot of challenges. Keep in mind that all of these challenges can be resolved with the right fulfillment service, but without fulfillment experts guiding you, the following challenges can make crowdfunding fulfillment exceptionally challenging:
It is very hard to gauge demand for a crowdfunding campaign, and it’s hard to “plan” for your campaign to go viral. Unpredictable demand makes fulfillment an enormous challenge, and a sudden spike in demand can make simple fulfillment get complicated very, very quickly.
The last thing you want to do is kill enthusiasm for a new product (or even the entire brand), but unpredictable demand can make this a difficult challenge to address.
Very Susceptible to Supply Chain Disruptions
Crowdfunding fulfillment is very susceptible to supply chain disruptions, especially if you use an international supplier (like one located in China) to fill your local fulfillment warehouse through traditional freight shipping. Depending on when you begin your campaign, you may not have the luxury of waiting out disruptions (like port congestion).
If you use freight shipping, you’re already looking at long timeframes for customers to get their products. They’re going to “back” your campaign, then wait until the campaign is over, and then you’ll start to manufacture products (if you haven’t started already with a successful campaign), and then they get shipped to customers.
If there’s a significant delay to any of that processes, customers could be waiting several months or longer to get their order, which will not reflect well on your brand.
Breaking into International Markets Can Be Challenging
If you want a crowdfunding campaign to be successful, you really need international backers to join in. Unfortunately, breaking into international markets with crowdfunding campaigns can be very, very challenging. First, long fulfillment times due to using freight shipping and local fulfillment can ruin the experience for international backers.
A bigger problem is the cost of allowing international backers to participate. Since everyone is “backing” your campaign at the same price, you may end up losing money on international backers because of how high shipping is. Or, you may decide to change international backers extra for shipping, which will kill your international conversions.
Who Should Use Crowdfunding Fulfillment Services?
Not everyone who launches a crowdfunding campaign will need crowdfunding fulfillment services, especially very small and limited ones. However, most medium to large crowdfunding campaigns will want to look into fulfillment services, especially if the business running them:
- Want to be sure to maximize the benefits of crowdfunding while minimizing the challenges
- Expect uneven demand but expect a high volume of backers/customers
- Need help creating a plan to break into international markets without losing money on backers
- Want a “hands-off” experience with fulfilling orders, and instead focusing their resources on other business areas, like product development, marketing, etc.
Use DTC China Crowdfunding Fulfillment to Get the Most Out of Crowdfunding Campaigns
Certain fulfillment providers may provide niche expertise that will help your crowdfunding campaign to thrive. For example, if you’re using (or plan to use) a China supplier, then partnering with a fulfillment provider that can provide direct-to-consumer (DTC) China fulfillment should be a priority.
DTC China fulfillment resolves the biggest challenges facing crowdfunding fulfillment, and it’s one of our best benefits that we provide our clients. Let’s take a look at what DTC China fulfillment is, and why it pairs so well with crowdfunding fulfillment.
What is DTC China Fulfillment?
DTC China fulfillment is an alternative to the traditional strategy of bulk ordering products and freight shipping them to a local fulfillment warehouse. Instead, your fulfillment center is located in China, along with your supplier, and this is the warehouse that ships products directly to consumers.
Cutting out the freight shipping to a local fulfillment center resolves most of the challenges that face crowdfunding fulfillment. Here’s how:
DTC China Crowdfunding Fulfillment Is Not Dependent on Demand
You don’t need to worry about making products too early or too late in a campaign with DTC China fulfillment, nor do you need to be worried about a sudden influx of demand due to a very successful campaign.
Most suppliers will have a lead time of just a few days (sometimes it’s even a day or less) to make and deliver new products to be shipped to customers, which makes it easy to accommodate uneven, spikey demand.
DTC China Crowdfunding Fulfillment Resilient to Supply Chain Disruptions
Since the vast majority of supply chain disruptions and delays are related to freight shipping, customs, and port congestion, the best way to avoid delays is to avoid using freight shipping, clearing customs with large volume orders, and using the ports altogether.
DTC China fulfillment means that products get shipped directly to consumers through alternative shipping lines that large, freight shipping, which are far less likely to be impacted by general supply chain disruptions, customs issues, and most kinds of port congestion.
DTC China Crowdfunding Fulfillment Helps Brands Break into International Markets
Finally, one of the best reasons to use DTC China fulfillment for crowdfunding campaigns is because it makes it possible to break into international markets while maintaining a positive customer experience and not losing money on international backers.
Shipping directly from China cuts the fulfillment time down to days, not weeks. For our clients fulfilling orders to international customers, they can generally expect international fulfillment times of 5-8 days, while cutting their international shipping costs by 50% or more.
EcommOps: Experts in DTC China Crowdfunding Fulfillment
Crowdfunding offers a unique approach to raising capital, gauging consumer interest, and building excitement around a product or a brand, but your campaign won’t be successful without the right crowdfunding fulfillment service to back it up. As the experts of DTC China fulfillment, EcommOps stands to provide benefits that you’ll rarely see among other providers, like:
- Warehouses in Shenzhen, China’s ecommerce hub
- Bilingual support (Mandarin/English)
- Order fulfillment in as little as a day
- 5-8 day direct-to-customer shipping
- Reduction of international shipping costs by 50%+
- API integration
- Iteration planning
- Factory relations management
If you’re interested in partnering with the leading experts in DTC China fulfillment, we’d love to hear from you. Fill out our online form, and we’ll be in touch about how we can take the headache out of crowdfunding fulfillment.
Crowdfunding Fulfillment FAQs
1. What is a crowdfunding fulfillment service?
A crowdfunding fulfillment service is provided by a fulfillment warehouse that caters to crowdfunding campaigns. Services can include unique packaging, inventory management, returns management, and of course, order fulfillment.
2. What are the benefits of using a crowdfunding fulfillment service?
The benefits of using a crowdfunding fulfillment service will vary from provider to provider, but in general, you can expect:
- Faster order fulfillment
- Easier inventory management
- A hassle-free experience that allows businesses to focus resources in other areas outside of fulfillment.
If you partner with EcommOps, additional benefits include:
- Less money tied up in inventory
- Faster lead times from factories
- 5-8 day direct-to-customer shipping
- 50%+ reduction in international shipping costs
3. What is the fulfillment process for a crowdfunding campaign?
The fulfillment process is going to look different for each different crowdfunding campaign. For example, a Kickstarter campaign may not begin production until well after the campaign has completed, while a Patreon service will fulfill products on a monthly basis.
4. What is the difference between a fulfillment warehouse and fulfillment center?
These two terms describe the same thing, which is a large building that takes in inventory and fulfills customer’s order as they come in.