Fulfillment: DIY vs. 3PL
Congratulations, your Kickstarter campaign was a success! While the funds are rolling in and the social media congratulations are buzzing, you’re facing the next big challenge: fulfilling your promises. For many creators, the most difficult part of a crowdfunding campaign isn’t raising the money; it’s delivering the product to your backers.
Manufacturing, shipping, and handling thousands of orders can be overwhelming. This guide will help you understand the two main approaches to Kickstarter fulfillment—doing it yourself or partnering with a third party logistics provider—so you can make the best choice for your project.
Understanding Kickstarter Fulfillment
Before you can ship a single product, you need a solid plan. Successful fulfillment starts long before your campaign ends. It requires careful planning and budgeting to ensure you can meet your backers’ expectations without eating into your profits.
One of the biggest mistakes first-time creators make is underestimating costs. Your budget needs to account for more than just manufacturing. Remember to factor in platform fees (which can be 8-10% of your total funding), payment processing, packaging materials, and shipping. It’s crucial to build a financial buffer to cover unexpected expenses like shipping damages or production delays.
The DIY Fulfillment Approach
Managing fulfillment in-house means you handle every aspect of the process, from storing inventory and packing boxes to printing labels and shipping orders. This hands-on approach is often the default for smaller campaigns.
Advantages of DIY Fulfillment
- Total Control: You oversee every detail, ensuring the packaging and presentation align perfectly with your brand. You can add personal touches like handwritten notes to create a memorable unboxing experience.
- Direct Backer Relationship: Handling fulfillment yourself keeps you directly connected to your supporters. This can be a valuable learning experience, offering insights into your customer base.
- Lower Upfront Costs: You avoid the fees associated with a fulfillment partner, which can be appealing if your budget is tight.
Challenges of DIY Fulfillment
- Massive Time Investment: Packing and shipping hundreds or thousands of orders is a monumental task. This can easily become a full-time job, pulling you away from other critical business activities.
- Space Requirements: You’ll need a dedicated space to store your inventory and set up a packing station. For many, this means turning a garage or living room into a temporary warehouse.
- Potential for Errors: Without established systems, the risk of making mistakes—like sending the wrong item or using incorrect postage—is high. International shipping adds another layer of complexity with customs forms and regulations.
The 3PL Fulfillment Approach
A third-party logistics provider (3PL), or fulfillment company, handles your storage, packing, and shipping for you. You send your manufactured products to their fulfillment center, and they take care of the rest.
What is a 3PL?
A 3PL provider acts as your outsourced operations department. Their services typically include warehousing, inventory management, order processing, and shipping. At Medallion Fulfillment, we have extensive experience managing special orders and kitting, ensuring that even complex rewards with multiple items are assembled and shipped correctly.
Advantages of 3PL Fulfillment
- Focus on Your Core Business: Outsourcing logistics frees you up to concentrate on what you do best—developing new products, marketing your brand, and growing your business.
- Scalability: A fulfillment company is equipped to handle large order volumes. If your campaign is more successful than anticipated, a 3PL can easily scale to meet the demand.
- Shipping Expertise and Better Rates: 3PLs ship in high volumes, which allows them to negotiate better shipping rates with carriers than a small business could get on its own. They are also experts in navigating the complexities of international shipping and customs.
Challenges of 3PL Fulfillment
- Cost: Partnering with a 3PL involves service fees. While you save on shipping, you need to budget for costs related to storage, order processing, and packing.
- Less Direct Control: While you still control your brand, you give up direct oversight of the packing and shipping process. This is why choosing a trusted partner is so important.
Choosing the Right Fulfillment Model
So, should you go the DIY route or hire a 3PL? The right answer depends on several factors:
- Scale and Volume: For projects with a small number of backers (e.g., under 200) and simple rewards, DIY can be manageable. For larger campaigns, especially those with significant international orders, a 3PL is often the better choice.
- Budget: While DIY seems cheaper upfront, the hidden costs of time, materials, and potential errors can add up. A 3PL has clear costs, but you must ensure they fit within your budget.
- Your Expertise and Time: Be honest about how much time you can dedicate to fulfillment. If you’re already juggling other responsibilities, outsourcing to a third party logistics expert can be a lifesaver.
When evaluating 3PL providers, look for a partner with experience in crowdfunding campaigns and the flexibility to handle unique requirements like kitting and assembly.
Key Steps in the Fulfillment Process
No matter which model you choose, the core steps remain the same:
- Manufacturing Oversight: Keep in close contact with your manufacturer to ensure production stays on schedule and meets your quality standards.
- Transportation: Arrange for your finished goods to be shipped from the factory to your home or your 3PL’s fulfillment center.
- Pledge Management: Use a tool like BackerKit to collect final shipping addresses from your backers. It’s best to do this just before you’re ready to ship to avoid issues with outdated addresses.
- Communication: Keep your backers informed every step of the way. Regular, transparent updates build trust and patience, especially if there are delays.
Finding Your Fulfillment Balance
Successfully fulfilling your Kickstarter campaign is a balancing act between cost, control, and customer satisfaction. The DIY approach offers maximum control but demands significant time and effort. A 3PL provider offers expertise and scalability, allowing you to focus on your business while ensuring your backers receive their rewards efficiently.
By carefully planning your fulfillment strategy from the beginning, you can turn the challenge of delivery into an opportunity to build lasting relationships with the supporters who brought your project to life.
Ready to take the stress out of shipping? Let the experts at Medallion Fulfillment & Logistics handle the details.
