Little Things Add Up #1 - Standard Costs
This is part 1 of 4 of our guest blog by Janice Turner - designer of Assembly (which funded on Kickstarter in July 2018).
There’s a reason why you want to plan in some financial risk when costing a Kickstarter: There will always be unforeseen costs in addition to the obvious costs. This series of blog posts will briefly cover the obvious costs but more importantly what other costs are you likely to encounter when starting up your new board game publishing business venture.
Note: This blog is written from a perspective of a UK creator – things may be different in other countries.
There are a host of costs you’ll encounter pre-Kickstarter, most of which you probably won’t have kept track of but if you plan to do this properly, keep track of them as you can offset them against your profits. The most common costs you will incur are discussed below.
Prototyping: You need to prototype to make a game (obviously!) and most of these costs will be hidden as, for most of us, game design is a hobby and who isn’t willing to spend a bit of money on their hobby?
Marketing: This cost is a little more obvious when it hits the wallet. In order to succeed you need an audience which required marketing. Yes, you can do lots of free things like being actively engaged on social media however you also need to consider:
Review Copies/Prototypes: At a minimum, you need to get copies of your game into the hands of reviewers and previewers so you’re going to have the cost associated with making these. You can reduce this cost by doing a lot yourself but printing isn’t cheap.
Preview Fees: It may also be wise to note that more of the previewers with larger channels are starting to charge for Kickstarter related videos ($100-$800) as there are just so many of them and videos take time to plan, shoot and edit. At the very least you should budget to send them a free copy of your game at one of the higher pledge levels.
Conventions: You may also want to consider attending conventions to help build your audience. If you would not normally be going to these and/or you are going to additional expos/cons, hiring demo tables and/or a stand then you’ve got some extra costs there.
Ads: Another possibility you may consider is using Facebook ads or similar to help build brand awareness and your mailing list prior to the launch of your campaign.
In terms of which of these you include is entirely up to you but I’d recommend you write these costs off and not include them in your Kickstarter goal. If your Kickstarter doesn’t fund, you get nothing, if it funds you may be able to recoup some of these costs but if you can’t then you are in no worse a position than if it didn’t fund at all. As a first-time creator you want your goal to be as low as possible but I do think it should be entirely realistic as hiding costs makes things look unrealistic to backers in terms of what a project actually costs, but this is more of a personal opinion – I like to be as transparent as possible.
Standard Kickstarter Costs
You’ve probably already accounted for all the obvious costs to get your game manufactured (assuming all other aspects such as art, but just in case here they are in brief.
Manufacture: This is the actual costs of making your goods. It is made up of the material costs, assembly costs, and tooling but other things you may need to account for are:
Minimum Order Quantity (MOQ): Most manufacturers have a minimum quantity of order to make your business worthwhile. This tends to range anywhere between 500 and 1500 for most manufacturers but could be as high as 2000 or even 10,000 copies!
Tooling: For your box design, for punchboards, for minis, etc.
Stretch Goals: These generally cost money so make sure you know how much before you launch your campaign!
Stock: You may decide you want to order more than you need to fulfil to your Kickstarter backers with the aim of selling them at conventions, online and with retailers. This isn’t something that you should generally include as part of your Kickstarter cost but if you plan to do this, make sure you have the money upfront to cover this cost.
Shipping: This is the process of getting your games from your manufacturer to your fulfilment centre and/or storage facility and consists of many parts. Exactly what is included will depend on how you are shipping (rail, truck, sea) and where you are shipping from/to. Some of the costs you may encounter include:
Freight forwarder fees, e.g. service charge, collation of goods onto a single pallet, documentation generation, etc.;
Transportation to the port;
Origin port and destination ports fees;
Shipping cost, noting that if you are shipping to multiple destinations you may be hit with minimum fees meaning your costs won’t necessarily half if you split your pallets.
Insurance in case your container falls into the sea – if anything, normally only a bare minimum is automatically covered;
Import charges and taxes: e.g. duty, VAT, bonds;
Trucking to final destination;
Unloading from the truck to the warehouse including incoming warehouse fees.
Fulfilment: This is the process of shipping your rewards to backers. You may opt for a single fulfilment centre or multiple scattered around the world, or you may be brave enough to self-fulfil your Kickstarter, but don’t forget to account for:
Project setup charge;
Stretch goals making packages heavier;
The weight of packing materials;
Price increases between campaign and actual fulfilment date;
Price increase due to changing supplier;
Insurance to cover stock whilst at the fulfilment centre (check what level they cover by default and if you are happy with this)
And if you plan to self-fulfill, don’t forget to include the cost of the boxes and packing materials in your shipping estimate. And if you’ve friends helping you, the cost of pizza for you all!
Fees: These are the obvious Kickstarter fee, payment processing fees and pledge manage fee (if used).