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The biggest challenge with many crowdfunding campaigns, is that many people running them don't get the economics right (and it's not always their fault). If they don't know any better, or don't have a background / experience in business / manufacturing / retail, then they don't know what they don't know. I've run two successful campaigns (one on Indiegogo, and one on Kickstarter), which both surpassed the fundraising targets. When putting together the campaigns, we modelled out everything thoroughly to account for all the costs that go into a campaign – manufacturing, packaging, shipping, duties, tariffs, etc Our team all had experience in manufacturing / retail / business, so we knew that it was integral to get the economics right, and to model out the pricing at different scenarios. If people are off on the economics, and a campaign hits scale, a $1 variance that isn't accounted for can be a big deal if you're shipping tens of thousand of units. One other key was to confirm costs and get commitments for those costs with factories before starting the campaign. If this isn't done, then manufacturers have leverage after a campaign is over and aren't always willing to negotiate on price. They know that a team needs a product made and has commitments to ship them, so sourcing factories becomes much more challenging after a campaign is complete. With that said, I've backed a number of successful campaigns that have come through with the product and timeline they committed to, so there are many successful campaigns, but some of the largest campaigns also prove to be the most challenging to follow through on. |