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Step-by-Step: How to Set the Perfect Price for Your Core Reward
Setting the right price is crucial in attracting backers and launching a successful crowdfunding project. This guide will delve into the intricacies of pricing to help you achieve crowdfunding success.
Launching a successful crowdfunding project requires a strategic blend of various elements that come together seamlessly. However, pricing plays a pivotal role in attracting thousands of backers to your project. In this comprehensive guide, we will delve into the intricacies of setting the right price for your product.
Step 1: Calculate Your Manufacturing Cost
Before setting your product's price, you need to determine the manufacturing cost per unit for the minimum. Keep in mind that this cost should ideally decrease as you produce more units. However, with the introduction of stretch goals, the cost might remain relatively stable.
Step 2: Define Your MSRP
MSRP, or the "manufacturer's suggested retail price," is the sticker price for your product post-Kickstarter. This figure varies across industries, so it's essential to consider the MSRP of similar products in the market, particularly those with comparable components. Perceived value is crucial in this step, as it influences how potential backers view your product.
Step 3: Incorporate Shipping Costs
Adding a shipping subsidy is vital. This includes all expenses related to shipping your product, encompassing pick-and-pack, postage, and freight shipping to reach the fulfillment center or customers directly. Many creators in the US offer "free" US shipping by incorporating the shipping fee into the reward price. This subsidy is then subtracted from the international fees charged to backers.
Step 4: Analyze Comparable Crowdfunded Products
Researching what other creators have charged for similar products is insightful. However, it's crucial to interpret this data cautiously, as some projects may not have priced their rewards optimally. Nonetheless, having an understanding of these figures can be valuable when setting your own pricing strategy.
Step 5: Fine-Tune Your Core Reward Price
Finalizing your core reward price often involves rounding it to the nearest 9 for psychological pricing appeal. However, if this adjustment would result in a significant price change, rounding to the nearest 4 or 5 can be a more practical approach. Remember, pricing is not an exact science, and your goal is to strike a balance between attractiveness and profitability.
While these steps focus on the core aspects of pricing your crowdfunding product, it's essential to consider additional factors such as Kickstarter and Stripe fees, freight shipping, and other ancillary costs when creating your overall budget. Often, a substantial portion of your profit might be reinvested in producing more variants of your product.
In conclusion, offering an enticing price for your crowdfunded product can significantly enhance your chances of Kickstarter success. A well-thought-out price not only attracts backers but also ensures healthy profit margins for you as you connect directly with consumers.