Entrepreneurs using the popular crowd-funding website Kickstarter are quickly learning that product manufacturing, fulfillment and distribution can be a huge headache. A recent CNNMoney survey of the top 50 most funded Kickstarter projects found that 84% missed their target delivery dates, with several projects being over a year late. Why are so many crowd-funded projects missing their deadlines? Here are a few common reasons we’ve seen:
- Difficulty in Demand Planning: Predicting the quantity of orders from backers prior to launching a campaign is tough to do. There are no numbers from the previous year to use as a basis and anticipating consumer reactions and virality is anyone’s guess. When actual volumes exceed predictions, delays usually arise.
- Manufacturing Complications: As the story of Twine’s Kickstarter shows, scaling the manufacturing process to match unanticipated backer order volumes and then navigating the waters of mass-manufacturing with multiple vendors, all on a limited budget and with limited resources, can significantly delay product delivery.
- List Mismanagement: Gathering order detail and shipping address information from backers is not as easy as it sounds. As SparkFun and the MaKey MaKey campaign of 2011 showed, backers can often enter faulty shipping information. Without the necessary list cleaning and verification prior to delivery, many errors can occur. SparkFun is still receiving 2 returns per week from its original product shipment from undeliverable addresses.
- Order Fulfillment Overload: Many Kickstarter projects resist seeking a partner in order fulfillment, thinking they can save money by assembling their product and mailing it from their own facility. We have found that for any Kickstarter project with more than 1,000 orders to fulfill, this is false. If the order volume is above this threshold, fulfillment houses can likely give back precious time, while also saving costs in shipping, improving delivery speed through economies of scale, and ensuring accuracy throughout the process.
To schedule a free Excelsior Integrated assessment of your product fulfillment operations, please click below. Assessments include analysis of existing fulfillment operations, gaps in process procedures, recommendations, estimated cost savings, and an Excelsior Integrated proposal when applicable.