We’ve teamed up with Ingram Micro Commerce & Lifecycle Services to help entrepreneurs ship smarter. Access more resources and free shipping and fulfillment consultations here.
Crowdfunding can open doors for growth that entrepreneurs may not have known existed. Whether you’re launching a new product line, expanding an existing business to reach more buyers, or starting a new business, platforms like Indiegogo can help you get your idea off the ground.
Consider the story of Bee Inventive, a ten-year-old Australian small business that specializes in harvesting honey. After launching a crowdfunding campaign to develop a new type of beehive on Indiegogo, the company—a father/son duo—raised $12.2M in 8 weeks. These funds opened doors for the company to expand into new markets including Canada, the Netherlands, and the United States. But this growth opportunity created a new challenge for Bee Inventive: how to fulfill orders for a uniquely bulky product, at a new level of scale, around the world. Bee Inventive’s challenge isn’t unique—it’s one of the biggest roadblocks that the Indiegogo team sees among entrepreneurs, across the board.
To understand why, put yourself in your customers’ shoes
Your buyers have high expectations for a smooth post-purchase experience. Unfortunately, backers, no matter how much they support the launch of your product, will become frustrated with unexpected fulfillment delays.
One of the most common pain points that entrepreneurs experience, following the launch of a successful crowdfunding campaign, is that in shipping and fulfillment. Across the board, entrepreneurs have pointed to the financial and logistical complexities of shipping as a “make or break” moment.
The solution? Outsmart these challenges before they have a chance to happen. Start thinking about shipping before you launch your crowdfunding campaign.
Here are 5 questions you need to ask, to prevent delays, unhappy customers, and potential financial drains:
- Where should I ship my product? Many entrepreneurs launch campaigns wanting to ship to multiple countries. Careful planning is a must when navigating this decision. For instance, customs and tariffs may introduce company-breaking complexities. In addition, some regions experience high levels of fraud and package loss rates. It may be better to limit your campaign to your home country, or in parts of the world that have reliable infrastructure for international shipping. You’ll need to do a cost-benefit analysis based on the number of customers you expect to gain/lose when making this decision. If you do decide to ship internationally, you’ll need to allocate time for understanding country-specific laws and tariffs.
- How many SKUs should I offer? A stock keeping unit (SKU) is an identification code for a product and where it is stored. This number, scannable as a machine-readable barcode, helps keep track of inventory. Depending on how many products you need to track or ship, you may need inventory management software. More SKUs not only impact potential savings when manufacturing at scale, but this also introduces complexities to shipping and fulfillment. For instance, did you know that if you have different sizes of an item (small, medium, or large), different colors, or different combinations of items (i.e. a purple bowl with a white lid versus a red bowl with a white lid), each will need their own SKU? Make sure that you have a plan in place if demand varies for each SKU.
- What kind of package will it take to ship my product? You’ll have the most straightforward experience if your product design and packaging fit standard shipping carrier dimensions. If not, you risk running into financial headaches—overspending on shipping boxes that are too big, or having to spend money for custom boxes. If you haven’t manufactured your product yet, you may want to explore adjustments that you can make to your packaging and design in order to optimize for packaging that is both as compact as possible and standard. Figure out your design and shipping constraints as far in advance as possible. There may be some subtle changes that can prevent financial and logistical headaches down the road.
- Where should I manufacture my product? Especially if you work with a third-party shipping and logistics partner, you’ll have flexibility over where you manufacture your product. Ingram Micro, for instance, has operations in 52 countries across seven continents. Depending on your fulfillment needs, you may be able to save money by manufacturing your product in regions that are closer to your customers or close to a fulfillment center.
- What are my options for working with a shipping partner? Every situation is different, but usually, entrepreneurs who are starting out small will use a combination of DIY and outsourcing before scaling to a larger fulfillment provider. For instance, STEMtrunk recently launched a subscription rental service for educational toys such as robots, drones, and build-your-own computer kits. After crowdfunding on Indiegogo, the company scaled to a point where they were shipping 200+ kits per month. The company was not yet big enough, at this point, to justify the cost of fully outsourcing its shipping and logistics operations. As companies like STEMtrunk grow, they may move on to work with larger shipping and logistics partners that support higher levels of scale. When companies are shipping thousands of items, it make sense to outsource these operations fully to a third-party logistics provider.
When you’re building a shipping and logistics strategy, one of the challenges that you’ll likely face is the lack of a blueprint. As described above, every company’s shipping and logistics operation looks different. From choosing your packaging to figuring out whether to ship internationally, you need to pick an approach that’s right for your business. Here are a few resources that can help you navigate this process:
- The shipping and fulfillment guide, created by Indiegogo and Ingram Micro, to help you navigate the complexities of shipping and fulfillment
- A Shipping & Fulfillment 101 webinar recording, hosted by Indiegogo and Ingram Micro