Kickstarter and Indiegogo are crowdfunding marketplaces focused on providing resources, support, and funding for creative ideas and products. Similar to marketplaces like Amazon, these marketplaces help connect businesses to their consumers.

Kickstarter was started in 2009 with a mission to bring creative projects to life by using crowdfunding and crowdsourcing. Indiegogo was launched in 2008 by Danae Ringelmann, Eric Schell, and Slava Rubi. The objective of these two companies is to provide a platform for people with ideas to present them and obtain public online funding as easily as possible.

Both companies’ business and operating model revolves around the concept of crowdfunding and crowdsourcing where support and funding to creative ideas are offered by the global community of millions of people.

Key points before starting a crowdfunding campaign

Once you are clear about the platform and how it works, it is recommended to think about few key points before you plan to start your campaign on any of the crowdfunding sites:

• How and where you’ll manufacture your products (if applicable)

• How much money you need to raise for your project (your funding goals)

• How you plan to get your orders to your backers (eCommerce fulfillment strategy)

• How to budget for marketing and other ancillary things

Once all these questions are resolved, you are all set. While Kickstarter and Indiegogo are both popular crowdfunding platforms, they have different ways of working.

How crowdfunding platforms work

Kickstarter

Kickstarter is a marketplace where people with creative ideas meet people who want to support these creative ideas and buy innovative products. The creators usually launch their projects on the platform with a set funding goal. They mention everything about the project like their idea through text, images, and videos, and even mention the rewards the backers will get if they support the creator’s idea. The rewards may be categorized into tiers with the top backers receiving more rewards. Backers financially support these creative ideas voluntarily, with the rewards as an incentive.

Once the funding goal is achieved, the backers’ cards are charged with the amount they have pledged and the amount is transferred to the creator’s fund. Then, the backers receive their rewards as promised. Kickstarter doesn’t own any of the projects or ideas nor do they set the prices. It simply successfully interlinked the two business models of online marketplace and crowdfunding to disrupt the crowdfunding industry. The business model complements these following business strategies:

• All-or-Nothing: Kickstarter employs an all-or-nothing strategy, where the creator receives the funding only after the project reaches or exceeds their funding goals. Similarly, the backers’ cards are charged only when the project is fully funded.

• Time Limitation: There is a time limit imposed for each campaign done. Not a penny is collected if the campaign fails to reach the funding goal within that limit.

• Rewards: The creators are also required to offer rewards to backers. There are different forms of rewards for different funding levels.

• Anonymous Pledging: Kickstarter allows backers to fund the project anonymously and without any rewards.

Indiegogo

Whether people are trying to raise funds for a unique idea or get helpful feedback from potential backers and customers, there are plenty of benefits that come with launching an Indiegogo campaign.

This platform allows users to set up a campaign page to tell their story, introduce their project to potential backers, and then solicit donations from these potential backers. The final goal is to raise enough money to fund their projects and ideas. Indiegogo has supported over 800,000 creative projects through its platform and boasts over 9 million active backers from over 235 countries and territories.

The fees are surprisingly minimal, which is perhaps another reason why it’s so popular for crowdfunding. Few things that this platform provides are:

• No fees for not-for-profit campaigns

• A variety of crowdfunding services to suit any project

• All-or-nothing or keep-it-all funding options

• Campaigns can be launched for any type of project (though retail ventures are the most popular)

• Quality customer support

• No requirement for pre-screen campaigns before launch

Benefits of using a 3PL warehouse for crowdfunding

To make your campaign successful, it’s important to start planning for order fulfillment just as you are setting up your campaign. Many campaigns fail as they forget to budget for fulfillment at the end of their campaign. Planning how you will fulfill your orders by getting estimates for shipping and factoring in these costs into your fundraising goal will help you in the long run.

Early planning enables you to allocate part of your budget on rewards or goods for your backers without running out of money, and in turn, boost your chances of achieving a profitable campaign. If you fail to plan well for the fulfillment, you may end up spending most of the funds you raise on shipping.

This is where third party logistics companies, or 3PL fulfillment centers, come in handy. Some 3PL companies, like ShipBots, offer transparent fulfillment pricing estimates to help business owners calculate their cost to ship their goods to various countries. You’ll also be able to figure out how long it will take and how much you may need to pay for taxes and duties.

3PL companies can also integrate with crowdfunding platforms, which makes it a breeze to handle your post-campaign shipping. The shipping rules, automated labels and customs forms, and branded tracking means you can provide a full, seamless shipping process to your backers, helping to ensure your campaign’s a success. Below are a few points about how 3rd party logistics companies help in the crowdfunding campaign.

• Manage the shipping through an all-in-one dashboard

• Access discounted shipping rates with over 250 courier services

• Access global fulfillment solutions from one account

• Provide dedicated campaign support and account management

• Create branded tracking emails and packing slips

• Create shipments with just a few clicks of the button

• Easy automated domestic returns within the US

• Automatically generate shipping labels and customs paperwork

With a network of warehouses around the world and a range of discounted shipping solutions, 3PL fulfillment providers can integrate with you crowdfunding platform to help make the campaign a success by enabling you to easily fulfill orders and ship to backers around the world.