Preparing your Kickstarter for retailers
Over the years retailers have played a big part in my Kickstarters and I would always recommend that creators consider their retail options before they launch their campaign.
- My first campaign in 2017 had 17 retailers who contributed £20,000 to the £280,000 that was raised (7.1%).
- My latest campaign in 2021 had 136 retailers who contributed £200,000 to the £1,195,000* that was raised (16.7%).
*Note, during my first campaign retailers pledged the full amount on the Kickstarter itself, on my latest campaign they only pledged a small deposit and the remaining money was collected later. I’ll talk about this further down, but it is why the amount shows £180,000 more than the Kickstarter page shows.
While much of the difference in total retail backers is due to the difference in size of the campaigns, it should be noted many more retailers back Kickstarter’s now than 5 years ago and even small projects can get a good number of retail supporters.
Why work with retailers?
This is an important question and I believe there are 2 answers depending on the expected size of your campaign.
Small campaigns (and first time creators)
If you’re about to launch your first campaign or you’re wondering how you’re going to sell enough copies to cover the costs of your 1,000 minimum print run then retailers are a great tool to help achieve that. In this situation I don’t consider retailers as a way of making money, I seem them as a way of reducing my costs.
Let’s say I need to print (and therefor sell) 1,000 games and I can get 10 retailers to buy 8 copies each, I suddenly only have to sell 920. The cost of those other 80 games is already covered and achieving my goals is now nearly 10% easier.
For my first Kickstarter I used this mentality and offered a retailer pledge that didn’t make me money, it was basically at cost (manufacturing/shipping/fees/time) to encourage retailers to take the risk on a first time creator as they had more room for profit.
You should make sure you don’t lose money, but when planning your retailer prices keep this in mind. You don’t need to make money off retailers for your first campaign, instead you should do what you can to help them help you succeed.
Large campaigns (where you have enough experience to know you’ll reach thousands of backers)
For larger campaigns things are different, perhaps you have a large following or you’ve run enough Kickstarters to know you’ll be printing thousands of games and not struggling to reach your 1,000 minimum print run.
At this point you will want to make a profit but you should be valuing your time above all else, large Kickstarters eat a lot of time and the last thing you want to be doing is going back and forth with hundreds of retailers negotiating details.
You should create a single sheet that contains your retail terms, pricing, and limits, and provide this to any retailer who expresses interest. You should work on a non-negotiable basis and make sure (in a friendly way) retailers know this is your offering.
Some will say yes, some may say no, but by providing everything up front you make the decision very easy. This will save you countless hours and you will likely still get 90% of the retailer backers you would have gotten anyway.
What a retailer wants
Retailers want lots of things but it is up to you to decide what you can offer:
- All Kickstarter exclusive content.
- Not to pay until the games are shipping.
- To get the games before they enter distribution and at the same time as backers.
- A 50% discount off MSRP.
- Free shipping.
There are plenty more special perks retailers would love to see, but these 5 are the key ones so let’s dive into them and do some negotiation.
All Kickstarter exclusive content
There isn’t too much I can say about this one other than it is an easy win, there is no reason not to provide Kickstarter exclusive content to retailers who are backing your Kickstarter. The single rule I have in place is that they must place their order before the Kickstarter closes.
I will not sell Kickstarter exclusive content to a retailer after the Kickstarter ends.
Not to pay until the games are shipping
At first this may seem a little daunting but I actually feel this is another easy win that all creators should be doing.
My standard approach is to request a non-refundable 10% deposit during the Kickstarter and then full payment prior to fulfilment.
The 10% deposit covers my time and removes any risk of them not paying as retailers don’t want to throw away their money. The remaining 90% will come in prior to shipping which means I will have the rest of the money before I have to pay my logistics and fulfilment bills.
This keeps my cashflow safe and makes the campaign more tempting for retailers.
To get the games before they enter distribution and at the same time as backers
I strongly believe your backers should always get their games before they become available in distribution. This can be planned for from the very beginning and offers your backers an extra reward for supporting you.
The same is true for your retail backers and I always recommend offering this guarantee and making sure you keep to it.
A 50% discount off MSRP
If you’ve never worked with retail or distribution before then you should always be setting your prices with the standard discounts in mind. As distributors will require a 60% discount, offering a 50% discount to a retailer should not be a problem.
The only time this can be challenging is if you have exclusive content that will not be available after the Kickstarter, but in those cases you should do the calculations on what is viable.
For example, let’s say you have 3 products:
- Product 1 costs $10 to make and sells for $50.
- Product 2 costs $7 to make and sells for $35.
- Product 3 is a Kickstarter exclusive that costs $18 to make and sells for $35.
Product 1 and 2 follow the standard pricing model and a 50% discount is viable, product 3 however doesn’t and a 50% discount won’t work. While you should avoid this if you can, I understand it can happen when offering something unique on a Kickstarter, so here’s how I would price it.
I’d offer product 1 at $25 and product 2 at $17.50, both giving a 50% discount. I’d then offer product 3 at $20 which means I’m making something in case prices change, while keeping the discount as close to 50% as possible.
However, rather than offering the products individually I would only offer them as a bundle which contains 1 of each. For the bundle my cost would be $35, the MSRP would be $120, and I’d be selling it for $62.50. Overall, I’d make $27.50 per bundle and the retailer would receive a 48% discount.
You may feel it’s wrong to sell product 3 without making a profit, but to me this is doing a few things:
- It’s offering a better deal to retailers helping me making more profit off the extra sales of product 1 and 2.
- It’s helping reduce my costs of manufacturing all copies of product 3. For example, I sold an extra 1,500 copies of some Kickstarter exclusives into retail on my last campaign. I didn’t make money directly off those 1,500 sales, but they helped bring down the cost of the other 10,000 copies which made me several thousand dollars overall.
The key thing here is to think about the bundle, don’t try to make the same amount of profit off each individual item, try to make a healthy amount from the combined offering.
The current shipping climate makes free shipping incredibly hard to offer, with any retailer order you’re going to be dealing with a lot of weight and shipping is not cheap.
The trick here is to be sensible, you may only run 1 campaign a year and are likely not too familiar with how much it costs to ship 75kg of games to Sweden. But I can assure you the retailer in Sweden is likely getting multiple shipments a month and they know how much it costs.
This means you should not be trying to over sell shipping, you certainly should not be making a profit on it.
The way I handle shipping is as follows:
- For smaller orders of £200 or less I pass on the full shipping price.
- For medium orders of £200 – £500 I typically deduct 20% of my profit on this order from the shipping cost and pass on the rest.
- For large orders of £500 – £1,000 I typically deduct 40% of my profit from this order and pass on the rest.
- For orders of £1,000+ I will offer free shipping to viable countries (UK/USA/some of the EU) and then offer a heavily subsidised price elsewhere.
To date I’ve only lost money on 1 retailer shipment (out of several hundred) for following this process and the time saved has more than made up for it.
My final note on shipping prices is this, if you can tick all the other boxes (the 4 points above) then people will be more forgiving of some shipping costs. However, if you don’t meet the other points then shipping costs may be your doom. This is why offering Kickstarter exclusives and late payment can be easy wins and should always be offered.
Let’s wrap this all up with a few extra things that I believe are important for successful retail offerings.
- Never offer individual products or allow retailers to pick their own quantities. Create a bundle which contains 4 or 6 (depending on how many you get in a box) copies of each item and offer that.
- Allow retailers to buy multiple bundles but set a limit. I typically allow up to 24 of each item, so bundles of 4 have a limit of 6 and bundles of 6 have a limit of 4. This allows larger retailers to buy more, but avoids heavy discounters having too many copies.
- Nothing hurts a Kickstarter more than a retailer advertising your game for less than you are selling it on your Kickstarter. I have a strict rule of no online pre-orders during my Kickstarters and will cancel any orders from people I see doing this.
- Reduce the amount of emails needed by having a pre-typed response for retailers. Include a link to your offering and tell them what you need if they want to continue (deposit, tax information, proof of business if you need it, and so on).
- Once your Kickstarter is live, you should post your retail offering to the Retailers who back Kickstarters Facebook group.
Frank West is a gamer and designer based in Bristol, UK. He published his first board game, The City of Kings, in 2018 and now works on other games and organising events in the local area. His goal? To design and publish games focusing on immersive themes, fun mechanics and beautiful components. If you have any questions or would just like a chat, feel free to get in touch at any time!
27th April 2022 at 8:51 pm
Hi Frank! This is awesome. Question, I understand why you would need Proof of business from the retailer, but what kind of tax information do you need from them? Does dealing with retailers impact your taxes? Thanks!
28th April 2022 at 1:57 pm
For proof of business I always try to keep it fairly relaxed as there are no legal reasons for it from a Kickstarter and sales perspective. The primary purpose is to make sure you’re not accidentally selling games at retail prices to individuals who then intend to resell them to friends or on Ebay. Because of this, I start by checking the delivery address is for the business the person say it is (using Google maps), and if it is, I’m normally happy to proceed without more formal checks. From a tax perspective, it can make a difference and it’s worth speaking with a local accountant to make sure you know all the details for your own country. Sometimes tax rules are based on where the seller is located, where the buyer is located, and even the total amount sold into the country, so I’m afraid I wouldn’t be comfortable giving general advice. Taxes are unfortunately one of the few things I always recommend spending a little bit of money on to speak to a local expert, as getting it wrong can cost a lot more.