Crowdfunding Fulfillment from China

China-manufactured crowdfunding projects can benefit immensely from local fulfillment.

However, just like manufacturing, crowd-funding fulfillment can make or break your project - choosing the right partner is vital.

Learn why crowdfunding fulfillment is different from standard eCommerce fulfillment, and how the correct partner can delight your backers and save you time and money.

Additional Reading

Dive deeper into China fulfillment with the following articles.

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Crowdfunding fulfillment in China

Crowdfunding & eCommerce fulfillment: key differences

While many logistics companies offer both eCommerce and Crowdfunding services, there are several important differences between both products. When choosing a crowdfunding fulfillment partner, it is vital that you ask the right questions, and that your potential partner is fully capable of provoding an optimised service.

Logistically, crowdfunding fulfillment is different for the following reasons:

  1. Simultaneous delivery of multiple parcels When delivering crowdfunding pledges, you will often have hundreds of packages destined for similar countries and regions. A skilled fulfilment partner will bundle your packages by country / region, and use direct line shipping to dispatch them in bulk. Upon arrival in the destination country, each parcel will be fulfilled by a local carrier.
    There are several advantages to this approach, including:
    • Cost optimisation (Paying for one large international shipment, as opposed to hundreds)
    • No import duty for your backers
    • Local logistics company for final delivery
    • Reduction of loss risk

      This feature is a deal-breaker - if your potential logistics partner does not offer this service, you should consider looking at other providers.

  2. One-off high volume pick/pack/stock

    Most eCommerce fulfillment providers have predictable and consistant volume through their warehouse, allowing them to correctly forecast staffing requirements and remain on delivery schedule. Crowdfunding fulfillment represents hundreds or thousands of orders at once - which can easily overwhelm staff and packing facilities. It is important that your potential crowd-funding fulfillment partner can felixibly scale as required. Consider asking a potential partner for references of previous succesfully fulfilled campaigns, and reach out for feedback.

  3. Order ingress is manual, not automatic

    Most eCommerce fulfillment centres are organised to accept orders via automatic means - APIs, direct integrations, etc.
    Typically, crowdfunding orders are rudimentary: supplied in the form of a CSV document. The partner warehouse needs to be able to quickly and accurately parse and integrate this information into their standard system. Any errors translate to delays, lost packages and extra costs.

Backer Support

Backer support via email and forum requires a huge investment of time. This workload becomes even more intense when shipping: statistically, 10 - 15% of backers will send a support request during dispatch. Backer support requests typically fall into the following categories:

  • Tracking requests / updates
  • Lost package assistance
  • DOA / broken packages

Likewise, the following tasks must be performed on a daily basis:

  • Undeliverable package assistance
  • Courier negociation & insurance claims
  • Reshipments & returns

If you do not have a customer support team in place, it is very easy to become overwhelmed.
A quality fulfillment solution should include the above services - allowing the project developers time to concentrate on production.
When shopping for a crowdfunding fulfillment partner, ensure that you are aware of what is provided and not provided - it can make the difference between success and failure.

Logistics and economics

Crowdfunding backers are different from standard eCommerce customers: If the project takes a few months to be delivered, there will be multiple address changes, cancellations and order modifications.
Likewise, crowdfunding platforms are inherently public: if one customer has a poor experience, they will immediately post their complaint. Customer dissatisfaction can become viral, leading to mass-cancellations and permanent negative messages that will harm future sales.

Consider the following scenario:

  • You have a product that sells for $30, of which $20 is manufacturing cost and $10 is profit.
  • Production and assembly takes 75 days.
  • You run a succesful campaign, and have 2,500 backers. You raise $75k: $50k in costs, $25k in profit.
  • When you ship, within one week you receive 250 support requests from backers.
  • 5% of orders are undeliverable due to incorrect address or changed address. Your logistics partner provides no support, so you have 24-hours to email the backer, and the shipper before the package is permanently lost.
  • All in all, you lose 2% of packages: you must reship 50 packages.
  • 50 packages represents $1,500 in lost revenue and $250 in reshipment fees.
  • Because of reships, you have 50 backers without a product, who are not prepared to wait for the next production run, so you are forced to refund them, which costs another $1,500.
  • At the end of the campaign, you have lost at least $3,250 and still have to pay your warehouse.

In a nutshell: your success is heavily influenced by your logistics partner.
Check out the real world crowdfunding case study where changing logistics partners saved over $40,000.

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