How to Correctly Charge for Rewards Shipping

How to collect accurate shipping costs


October 24, 2022

One of the biggest hurdles that creators struggle with during crowdfunding is the logistical phase of the campaign.  Creators tend to be makers with innovative ideas, product development experience, and a desire to change the world, but most do not have a clear understanding of global shipping best practices and costs. 

Some creators make the strategic decision to include free shipping as part of the reward. This can be advantageous because it gives backers a sense of security knowing that there will not be surprise costs associated with receiving their reward, especially for international backers who often pay more for shipping. However, building the cost of shipping into the reward price, will increase the overall cost of each reward tier and can be tricky when trying to cover shipping costs to all destinations. Creators should also make backers aware of any potential duties, taxes, or customs fees that may apply to your reward if you choose not to cover all those costs as part of the free shipping. 

In order to ultimately succeed and earn profits on your funding goal, it is vitally important to charge shipping costs appropriately. Making a product available worldwide gives the opportunity to back the project to the maximum amount of people, but can create headaches and unforeseen costs when it comes to shipping. Here are some key tips to understand when estimating how much to charge for shipping on your rewards. 

Research Other Successful Campaigns

Learn from others that have gone before you. Research past campaigns, especially ones that fit your product niche to get an overall idea of how they handled shipping issues, costs, reward tiers, and logistics. This information can be helpful to create a baseline cost. It is a great chance to also consider how these successful campaigns packaged and grouped their products and add-ons. If you are working with a crowdfunding agency for campaign creation or marketing, they will also have a great deal of knowledge about shipping practices that can help guide you through the logistics process. 

Choose Options for Reward Tier Shipping

Kickstarter has important shipping options available when setting up reward tiers and add-ons that allow creators to select which countries are eligible for shipping. Shipping can be limited to certain countries or made available worldwide. These options allow creators to exclude countries that can be problematic, or cost-prohibitive to ship to. If a backer reaches out to you to arrange to ship to one of the excluded countries you could make special arrangements that satisfy both parties. If shipping to “Anywhere in the World”, Kickstarter also allows for a global shipping rate with exceptions for certain regions which may be more costly. In this way, backers only pay the appropriate amount of shipping for a more customized experience. No matter which options you choose, make sure to clearly communicate these costs to backers within the reward tier description and campaign. Backers do not like unexpected costs and good communication and documentation is the key to avoiding issues. 

You can also provide backer with more shipping options through PledgeBox, such as airfreight, advance shipping, etc. Just add these options as add-ons and select the region of the backer that can view this product to make this an additional service.

Accurately Estimate Shipping Costs

The time to think about shipping begins before your campaign even goes live. You should understand your reward tier levels and what is included in each. Global shipping is accomplished in different ways but usually includes freight transportation by truck, ship, plane, or a combination of the three. The cost for this kind of freight is based on dimensional weight – an accounting of the size and weight of your packages that helps freight companies efficiently move items. To begin the process of shipping estimation you must understand the exact size of weight of your reward including product packaging. Also, most rewards are not shipped directly to customers in product packaging, rather it also includes an outer box to protect the product packaging. Cost for both need to be accounted for. Don’t forget to account for add-ons. These additional items may increase the size and weight of the typical product unit or require separate shipping. 

Work with Fulfillment Experts

Once you have identified your reward tier packaging size and weight, reach out to freight forwarding companies for estimates regarding shipping both domestically and internationally. A good place to begin is by using online shipping calculators available from most major domestic and international shippers. 

You may also choose instead to work with a logistics company that specializes in crowdfunding fulfillment. Some can receive your product from the manufacturer and package and sort the rewards before final shipping. Remember that not all freight companies are the same, some will require you to prepare your goods for pickup and deliver to their warehouse from your manufacturer and only then provide service to your backers. If you are not comfortable with handling the different transportation stages of your product, it may be smart to work with a freight broker, who can help you get your products from the manufacturer all the way to their final destinations.  

What happens if I go over budget? 

One of the most difficult situations to handle during any campaign is undercharging on shipping. This can eat into your funding amount and be a costly mistake for your project. To avoid this situation many creators build a buffer amount into the shipping cost. This can be helpful to cover unforeseen costs to certain regions, increases in global shipping rates over time, and shipping problems caused by clerical errors such as incorrect addresses. A cost buffer can alleviate overspends but can also make your shipping cost-prohibitive for some backers. Keep shipping costs reasonable by planning well and being accurate from the beginning. Third-party pledge management software can be helpful for handling fulfillment, shipping, and returns and is a good way to run after-sales customer service tasks.  

PledgeBox allows creators to charge additional shipping costs at the end of the project. All you need to do is enter the correct shipping amount and the system will automatically recalculate the difference and charge or give credit for it.

The keys to successful reward shipment to backers are - to start early, do your research, accurately calculate costs, and outline a shipping plan ahead of time. Once your campaign is rolling, you will be busy with other exciting commitments. Getting ahead of the game will ensure a smooth process for you and your team and give your backers a great initial experience with your brand that can pay dividends now and in the future.