>my last post here was struck so this is a re-post

I've seen a number of questions lately on how to calculate the product pricing and costs associated with running a Kickstarter -- and this week I was helping both City of Sirens and Alarial's Blessing in planning their reward tiers, items, and costs per item -- I've figured it's about time to create a dedicated, streamlined method for doing this part of the campaign planning in a spreadsheet.

Let's get a discussion going on how to handle this task.

Designing Reward Tier Bundles

The first thing you likely want to do is plan out what items are included in each reward tier bundle.

In the below spreadsheet, see how the reward tiers are broken down by columns, and then the individual items contained in each reward tier bundle are broken by rows:

A reward tier and item chart using Google Sheets

(Shoutout to Marco Piana from Big Empty Blue for inspiration on the layout)

Calculating Landed Costs & Item Prices

It's important to view the landed cost per item unit (COGS), and then figuring a fair market price for each item. From there, you can calculate the MSRP price of the add-on items and reward tiers as whole -- and by using a percentage, the discounted reward tier price:

A detailed view of the retail pricing and fees per reward tier on Kickstarter

To elaborate on the MSRP price, it is best calculated using standard Keystone Pricing. The Keystone Price is how retailers will determine the product price for bulk Wholesale Pricing, and they are typically looking for a 50% discount from the MSRP (Keystone Price).

In essence, the Wholesale Price is typically 2x the COGS, and the Keystone Price is therefor typically 2x the Wholesale price.

(SIDE NOTE: big box retailers like Walmart will ask for merchandising deals as low as 30% to 20% of the MSRP, which leaves you very little after it's all said and done -- the key here to profitability is of course the massive scale of their bulk purchases)

There are a number of costs you will want to be aware of while calculating your Landed Costs, which are the costs associated up to the point of getting the product to your warehouse, such as:

• Cost Per Unit from the manufacturer
• Duties and Tariffs
• Inbound Freight per unit (2% is a safe estimate)
• Shipping to the warehouse or customer, weight of package ($7 for smaller items)
• Warehouse pick & pack fees ($1.25 for smaller items)

For the inbound freight per unit, you can use 2% as a safe estimate until your manufacturer and freight forwarding service (such as UPS, once it lands at the docks) can get you a better estimate once you are ready to actually place the final order.

The shipping to the customer can be estimated using EasyShip's shipping calculator.

Calculate the landed cost to figure the keystone price (MSRP) and wholesale price (Bulk pricing)

Make sure to backcheck the calculated keystone price against a fair market price for competitor products. If your keystone price is not within a 20% range of a fair market price, it's important to find a way to bring the MSRP back into this 20% range. This will ensure backers are not shocked by the price or hesitating on price alone.

Methods of reducing the Cost Per Unit or Landed Cost might include:

• Searching for different manufacturer quotes
• Choosing cheaper components
• Simplifying the product design
• Flat packing your product in the packaging box so that the customer themself assembles it
• Choosing a dedicated 3PL per shipping region if there are enough orders in a specific region to justify it
• Choosing a more efficient logistical chain for your material sourcing
• A freight consolidator service that puts your product alongside other products in a single cargo container
• Picking a more favorable tariff categorization

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For digital products, researching the fair market price is still incredibly important. Do you research using competitor product pricing to understand the fair market price for individual items. You can infer the fair market price of individual items on other Kickstarter projects by looking at the delta difference between their reward tier prices and the additional items included with each tier. For example, for a video game, you might see the base digital game key cost $30, while the next reward tier costs $40 for added Digital OST and Digital Artbook -- thus, the inferred fair market price for the Digital OST and Digital Artbook are $5 each.

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Calculating Cost Of Sales

Finally, you will want to calculate the Cost Of Sales in order to figure the final net margin on each individual unit item or reward tier:

• Kickstarter platform fees (5%)
• Credit Card Processing fees (3%)
• Returns, refunds, and cancellations (5% is a healthy ratio)
• Customer Acquisition Cost

Calculating the cost of sales for reward tiers

Product Packaging & Handling

For smaller creators, you may be just shipping the product to your own house for pick and packing, and you can source your large boxes from ULine, or smaller cardboard boxes on Amazon for even cheaper prices.

A 3PL Logistical partner can certainly make the process a lot easier, though, especially for large Kickstarter campaigns in excess of 1000+ orders, so I highly recommend hiring a 3PL partner in that scenario. We'll get into that in a moment, after this section.

Some tips and tricks here might be to explore Flat Packing, where your product is broken down and flattened to reduce the size of the box + shipping container. Think of Ikea furniture, where the customer must assemble the product at home.

Pirate Ship is the most popular DIY service for postage, pickup and shipping: https://www.pirateship.com 

An important feature of Pirate Ship is SIMPLE EXPORT RATE shipping, which can save customers up to 50% OFF shipping costs internationally. However, the package must be under 4 lbs to receive this special discount. 

For small orders batches to international countries, this can be a huge saver!

(NOTE: Simple Export Rate will not be available on your Pirate Ship account until you first create an account and contact the customer service chat bot requesting it to be added to your account)

Third Party Logistics (3PLs)

From my understanding with past clients, it usually takes about 2 months from the 3PL receiving inventory for them to fully deliver to all doorsteps. There are dozens of 3PL companies that cater to Kickstarters, many having extensive experience with it or built around it.

Here's a list of some common 3PLs that my clients have used in the past, along with their homebase distribution warehouse locations (they each typically have multiple warehouses around the globe, though):

• Canada & USA: 
  • Pledge Manager
  • Moco Shipping  (California)
  • Diamond Comics (Mississippi, UK)
  • White Squirrel (Seattle)
  • Naylor Games  (Wyoming, UK)
  • QM Logistics  (Florida)
  • Fulfillrite (New Jersey)
  • BridgeDistribution (Georgia)
• United Kingdom & EU: 
  • Spiral Galaxy Games  (UK)
  • Diamond Comics (Mississippi, UK)
  • Naylor Games  (Wyoming, UK)
  • Meeples Group  (Netherlands)
• China:
  • NextSmartShip  (worldwide)
  • Cainiao  (worldwide)

There's a lot to this topic and it's a field in itself, especially depending on how much you want to micromanage various aspects. But typically your manufacturer can handle the part of getting it to the 3PL's doorstep and then the 3PL can handle it from there... but you can also go in and manage lots of those aspects as well and potentially save money from having somebody else manage the details for you.

European Packaging

When fulfilling to Europe, there are important legal specifications that must be complied with, namely various markings on the product packaging, inserted paperslip or product box:

1. The CE / CE UK mark
2. The Publisher's name and address.
3. The EU Representative's name and address (as required by EU legislation). 
4. The UK Representative's name and address (as required by UK legislation). 
5. Product identification details (e.g., batch number, serial number, model number) for traceability. 
6. All required warnings and instructions in English.

examples of CE / CE UK marks

Your manufacturer will typically handle these markings for you, as they are legally liable for compliance. However, some less reliable manufacturers may fail to comply with all required markings – make sure to get a test-print or small-batch order prior to mass-production so you can verify that all markings appear on the product box, or at least on the packaging itself and a paperslip in the packaging.

In the worst case scenario, where they mass produce the wrong production art on the box or otherwise missing the CE markings, serial numbers, etc. you should ask the manufacturer to apply stickers to the box prior to shipment or provide you with such stickers that bear the missing markings to apply to the boxes.

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Free Calculator Resources

I hope this part of the guide was helpful! I have the Reward Tier Worksheet available for free download, here:

https://prelaunch.marketing/products/reward-tier-planner

and the and COGS Calculator available for free, here:

https://prelaunch.marketing/products/cogs-breakeven-calculator

Another common thing I see mentioned is how to factor in the Development or Tooling costs into your Kickstarter. I recommend putting these costs aside from the per-unit costs, and instead apply them to your overall Minimum Funding Goal for your Kickstarter project.

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Communicating Shipping Costs

Now let's move forward to the presentation and programming of the reward tiers inside Kickstarter.

The first part I'd like to cover here is the presentation of the Shipping Costs. This is a crucial, often overlooked element that can substantially reduce the conversion rate of your Kickstarter Followers and VIP $1 deposits.

If the shipping costs are too high, as is common when shipping from Europe or Australia to other countries, you will often find the cancellation rate begins to exceed 5% and the end-of-campaign Kickstarter Follower and VIP conversion rates into backers can drop by 10% or more.

For projects that are only selling within the USA, you do not need to place shipping costs anywhere. Instead, consider baking the shipping cost into the product price.

However, for projects selling internationally, you should design a chart near the bottom of your Campaign Page which lists estimated shipping costs per country:

A shipping chart from a recent client, \"Dragon Buddies\"

Then add plain text below the shipping chart to clarify any international fees or VAT taxes for backers:

>International Shipping & Customs
For backers outside the United States, your country may charge import taxes, duties, or customs fees when your package arrives. These fees are set by your local customs agency and are the responsibility of the recipient.
Unfortunately, we aren’t able to control or pay these charges, and we also can’t communicate directly with customs offices on a backer’s behalf. If a package is delayed, held, or inspected by customs, the local agency will need to work directly with you to resolve it.
We’ll always do our best to provide accurate shipping information and documentation to help things move smoothly.

Shipping Costs For Add-ons

Now let's talk about shipping prices for add-ons, as this is the most common programming error on a Kickstarter's shipping details.

It’s very important to understand that the estimated shipping fees for add-ons will stack with the selected quantity of an add-on AND their selected reward tier. In many cases, the original reward tier's estimated shipping is a sufficient amount to ship them their rewards along with any small add-ons without having to charge additional shipping fees per add-on item.

For example, when the Add-on is set to $5 “estimated shipping”, and a user adds 10 units of the add-on to their shopping cart, the estimated shipping will be $50. For many types of add-ons, such as enamel pins, card decks, or other small items, an estimated shipping cost of $50 for 10 units makes no sense and consumers will refuse to purchase the add-ons. If they revisit their purchase later and discover this detail in their order, they may decide to cancel their entire pledge.

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Reward Tier Prices

Designing the prices of the individual reward tiers should be looked at as a whole. This "Price Ramp" can be likened to a rollercoaster ride, where the user gets excited to keep scrolling through the reward tiers.

Ideally, the backer’s journey down the pricing ramp is smooth and effortless. This allows their eyes to glide down the ramp, easily digesting the prices.

With a smooth ride, the potential backer will generally stop at the first tier beyond the limit of which they are willing to afford. After reading the benefits, they return back up a tier and begin the purchase process.

Example of a user's journey through a list of Reward Tiers, shown using a red arrow

When the prices are simple, particular changes in the digits and number of digits are what register in the reader’s mind while digesting the prices.

For instance, alternating 0’s and 5’s at the end of prices help signify differences and make tiers stand out.

Similarly, when an additional digit is added, they know the price has increased substantially and that it is a different level of tier.

Take the following ramp of numbers, for example:

>$16 → early bird
$20 → digital core package
$30 → early access + recognition
$45 → digital collector (KS exclusive DLC)
$60 → digital collector + physical core package
$85 → physical collector
$125 → all collector items
$300 → collaborate or retailer wholesale
$1000 → collaborate more

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Secret Reward Tiers

Now let's talk about Secret Reward Tiers.

A secret reward tier is a special link you can send for access to a special private reward tier that isn’t available publicly.

To set a reward as a Secret Reward, simply choose “Select backers only (Secret Reward)” for ‘Audience’ under the ‘Availability’ section when creating the reward. After the reward has been saved, you can go ahead and share the link.

Usage examples of Secret Reward Tiers include fulfilling VIP deposits, VIP add-ons, or even giving previous backers from past campaigns a special bonus in exchange for continued support.

How to set up a Secret Reward Tier using the Reward Tier editor on Kickstarter

If you have multiple secret tiers to give them, place each link inside the email to your VIPs.

EXAMPLE OUTREACH FOR SECRET REWARD TIER OFFER:

>EMAIL SUBJECT LINE:
[VIP DISCOUNT or VIP FREE GIFT] Inside!

>EMAIL BODY:
Hello!
Our new [product type], the [PRODUCT NAME], just launched on Kickstarter. It features [key differentiator] and [spotlight add-on].
I've prepared a special 10% OFF discount for all our [returning backers / VIPs]. You can select any of the secret reward tiers below, which are exclusive to [returning backers / VIPs] only (that's you!):
Tier Name #1 (10% DISCOUNT): [link to secret tier #1]
Tier Name #2 (10% DISCOUNT): [link to secret tier #2]
Tier Name #3 (10% DISCOUNT): [link to secret tier #3]
Be sure to check out the Kickstarter and let us know your feedback by replying to this email! Once again, without your support these projects would not be possible and I thank you from the bottom of my heart.
Best regards and happy [brand activity, ex. “journaling”],
-[Your Name]

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Kickstarter Backer Exclusive Gifts

The best-converting, simplest and PR-friendly option, is to offer a Kickstarter Exclusive Reward for all backers.

Consider giving all backers an exclusive item, such as exclusive DLC digital content, collectible cards, etc. This helps drive incentive to become a backer:

An example of a Kickstarter Exclusive freebie for all backers from a recent client, \"Dragon Buddies\"

In this instance, all you have to do is simply add any free gift-item to each Reward Tier in the Reward Tier Editor.

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Reward Item & Add-on Ideas

Many times, creators want to keep their offering simple. While this is good for tech and regular physical products where consumers are primarily interested in an early-supporter discount, this is not effective for lower-priced products in the entertainment category such as Video Games, Tabletop and Board Games, Comic Books and Novels, etc.

For entertainment products, it's imperative to increase the average order value and provide exclusive goodies and collectible items -- not only to attract backers and give them a reason to support you instead of waiting later until the release of the product on regular storefronts, but also to make sure that any pre-launch marketing is worthwhile and profitable.

Here is a list of ideas to help brainstorm reward items and add-ons:

• Badge
  • A shoutout to their social profile(s) of choice (for high-price / collaborative reward tiers)
  • Premium Discord Channel / Badges / Name in Credits / Memorial Room
  • Your Message In-Game
  • Name plate customization or your name engraved on the physical product
• Bundles
  • Bundles of core items to share with their friends 
  • Expansion pack
  • Extra battery pack
  • All style / material upgrades
  • Wholesale multipack
• Digital Content
  • Exclusive DLC / Skin / Character / Equipment / Pet / Item
  • STLs
  • D&D Character Tokens
  • VTT Integration
  • Desktop Wallpapers
  • Soundtrack / Artbook
  • Patreon 1 Month Membership
  • Lifetime Service Access
• Collectible
  • Physical Box or Game Copy (for video games, insert a key printed on paper inside the case)
  • Miniatures / Figurines / Papercrafts
  • Manual Handbook / Rulebook / Game Strategy Guide / Compendium 
  • Upgrade books from softcover to hardcover
  • Additional variations of Book / Comic cover options
  • Foil Stamping on book cover
  • Book Edging / Edge Printing
  • Slipcase
  • Developer-Signed Merchandise
  • Character Trading Cards
  • Original Signed Art
  • Tarot Cards
  • Plushie
  • Certificate of Authenticity
• Game Statements
  • Game-Branded Dice
  • Playing Cards
  • Play-Mat
  • Tokens
  • Card Sleeves
  • Mousepad
  • Coffee Mug
  • Drink Coaster
  • Magnets (fridge)
  • Postcards
  • Bookmarks
  • Journal 
  • Tote Bag
  • Stamps Washi Tape
• Art
  • Cloth Map
  • Calendar
  • Concept Art Posters
  • Concept Art Book
  • 300 Piece Jigsaw Puzzle of Cover Art
• Audio
  • Physical Soundtrack OST CD
  • Physical Soundtrack OST Vinyl
  • Piano Book
  • Audiobook of exclusive content (such as using murf.ai)
• Accessories
  • Pins / Sticker / Embroidery & PVC Patch
  • Keychains / Keyring / Acrylic Charms
  • Wallet
• Jewelry
  • Pendant
  • Ring
  • Earring
• Clothing
  • Shirts
  • Hats
  • Scarf

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Kickstarter's Pledge Manager & Reward Surveys

Last stop after the campaign ends are the Reward Surveys.

Reward Surveys are used to collect backers’ shipping addresses and any additional information you need from them to fulfill their order (such as choosing their preferred colorway or other bespoke customizations). 

To send out surveys, you can use Kickstarter’s built-in survey tool via the Pledge Manager located in the left main menu:

The Kickstarter Pledge Manager is located in the Creator Menu in the left panel

After initiating the Survey Setup process, Kickstarter will ask a couple questions about VAT and Shipping. In most cases, you will want to select “None of the Above” in regards to whether you have charged VAT yet:

Example of the Kickstarter Pledge Manager initial setup questions

If this is the case, you must then next select “I consent to Kickstarter collecting taxes from my backers”:

Example highlighting the checkbox for consenting to Kickstarter collecting taxes on your behalf

After answering the starter questions from Kickstarter, you will have access to the full setup screen for the Reward Surveys:

The main dashboard for Kickstarter Pledge Manager

For the Welcome Message, decide upon one or two actions that you want your backers to take, such as “visit our webshop for more”, “make sure to claim your free month on Patreon”, or “subscribe on YouTube for more content” and then include a URL link to that place.

EXAMPLE WELCOME MESSAGE FOR A KICKSTARTER REWARD SURVEY:

>“Thank you for backing [ProjectName]! We will need to collect some additional information to fulfill your rewards. Be sure to also visit our webshop for more collectible goodies, here: [link]”

For the Survey, you will ask questions related to any customization options on the tiers themselves. For example, if your product comes in white or black, you will want to insert a multiple choice question to allow them to choose. Their choices will appear as a separate column on the Backer Order CSV Sheet later on.

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Prepping The Backer Orders CSV Sheet For Your 3PL

After you've collected all the reward surveys, you may have additional questions about how to process your Backer Order CSV sheet for your 3PL partner.

The 3PL partner will often have an automatic tool for editing the CSV sheets to make it compliant with their systems.

If they don't have an automatic tool for you, you will just need to clean up your CSV sheet manually using a tool like Google Sheets to match the specs for your 3PL. They should offer you a template or guide on how to do this, and at the very least they will let you know their specifications.

For example, you will likely need to rename the Headers for each column after exporting the CSV file from Kickstarter, so you might want to import the Backer List CSV Sheet into Google Sheets prior to doing any other operations on the file.

To isolate various tiers or countries as needed for Regional 3PL Partners in Google Sheets, simply sort your sheet by Country and do simple cuts in groups of rows to a new sheet.

If they ask you to change the delimiter, simply right click and press "Edit" on your exported CSV file from Google Sheets, and then inside Notepad press "Edit" in the top menu and "Replace", then enter a ',' for a comma and replace it with the desired delimiter as requested by the 3PL.

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Closing Thoughts & Discussion

Let me know your thoughts, and looking forward to hearing your own methods of planning reward tiers, pricing, landed costs, COGS and shipping for Kickstarter campaign fulfillment!

Reading all the declassified reports and watching the videos, it rings home a book I read many, many years ago as a teenager called "Thiaoouba Prophecy". It's a now popular, out-of-this-world book that the author (now dead) wrote in 1986 and published with over 1 million readers to date, which describes an alien-abduction encounter:

>(PAGE 6) About 100 metres from us was an enormous sphere, from which emanated a bluish Aura. I later learned that it measured 70 metres in diameter. The light was not steady, but shimmered, resembling a heat haze when one looks from a distance at sand heated by the summer sun.

In a recent post in this subreddit yesterday, I saw that most reports were for spherical, orb-like in nature that glow various colors:

>**The most consequential single document is the "USPER Statement" — a SECRET//NOFORN narrative by a senior US intelligence official describing a multi-hour orb encounter at a Western US classified facility in 2025.** Multi-helicopter aerial response, FLIR + NVG sensor corroboration, swarm formations. The aircrew's closing line, exact quote: *"The orbs appeared to break off from [CALL SIGN 1] and pursue the [MILITARY AIRCRAFT]."*

>**The "Orbs Launching Orbs" briefing is real** — 7 federal LE special agents, 2 days, 4 distinct UAP categories, and AARO sent personnel to the site for follow-up measurements. Witnesses estimated one orb at 500-600m and helicopter-cockpit-sized; AARO measured ~1050m and 12-18 meters across.

>**An AC-130 gunship in active combat over Iraq, Sept 2024** — with a Griffin missile in flight after weapons release, a SOLID UAP with significant IR heat signature transited the sensor field of view. The MISREP notes "possible object detachment before leaving the sensor FOV." Same morphology as the 2023 Western US Event, 7,000 miles away.

The interesting part here to most people is that the military actually measured one of the object's size and distance, and the amount of corroborated reports of the incident both within the military and the general public.

But what interests me more is the "orbs launching orbs" part, which the Thiaoouba Prophecy book from 1986 describes in excruciating detail many times throughout the book:

>(PAGE 12) As I watched, I was surprised to see, slightly below the middle of our vessel, a small sphere ejected, like an egg from a hen. Once outside, this sphere accelerated rapidly towards the planet below. As it disappeared from view, another sphere emerged in the same manner, and then a third. I noticed each sphere was being monitored on separate screens by different groups of astronauts.

Looking back at the book, there are also some other unexplainable coincidences to what we know now such as what we now call the "Great Flood Theory" as proposed by Graham Hancock around 2004. While this theory is controversial, it's notable that a random Australian farmer writing his alien-abduction account described the same type of events, occurring at the same historical timeframe as the current Great Flood Theory, predating Graham Hancock by almost 20 years.

In fact, even stranger, is that the Thiaoouba book states that the Younger Dryas and its deglaciation was initiated by vulcanism, instead of a meteorite as Graham Hancock proposes. Recent ice core analysis from ivy universities around the world since 2020 have corroborated the vulcanism hypothesis, for example this study here and here and here and here.

In any case, these new declassified reports and videos bring a whole new relevancy and accuracy to the Thiaoouba book that I cannot ignore.

I must know, if anybody can help -- Are there any other UAP or UFO-encounter literature prior to the 2000's that describe these orb-shaped UFOs, or "orbs launching orbs" -- especially in such detail that matches the declassified military reports?

Or is this truly the only one?

This aint right, folks.

"Porcus" was the first project to try a Kickstarter-Follow free gift as suggested by Kickstarter's latest feature update in their official blog:

Kickstarter's official blog suggesting to use the new \"Follow-only Update\" feature to give gifts to pre-launch followers

Inside the blog for the official update, they suggest a "Pro tip" to turn your followers into backers by offering a Secret Add-on or Free Item via the Backer Report:

Kickstarter's official blog suggesting to add Free Items to pre-launch followers to thank them for backing

However, these features do not work as promised to fulfill these intended goals.

A secret add-on has a minimum price of $1, and cannot be set to $0.

To hinder things further, you cannot assign a free item to a pre-launch follower via the Backer Report dashboard who hasn't backed the campaign yet. Which makes sense to some degree, even if not ideal.

However, to add injury to insult: a project update for Kickstarter Followers will disappear for a user as soon as they back a campaign.

This unfortunately created mass confusion for Porcus's backers and pre-launch followers, who had backed but could no longer see the Project Updates viewable only by pre-launch followers:

Examples of the PR Meltdown caused by using Project Updates viewable by only prelaunch followers

These Project Updates contained crucial information about how the free items would be added to their pledge manually later on.

After it was said and done, we've already lost an estimated 200 backers at $115 AOV each, a whopping $25,000 loss and counting.

When I approached the Kickstarter Team about the massive financial damages, their reply was to say that, yes, Project Updates to followers-only will disappear once they back the campaign -- directly admitted that it is less than ideal in response to claims that it caused financial damages -- and that this was explicitly intended as the expected behavior for the new feature that they themselves recommended us to use in this manner.

Kickstarter Team's official response to claims of massive financial damages by following their \"Pro tip\" suggestion

Honestly, I have no words at Kickstarter Team's gross negligence and or maliciousness toward creators who use Followers instead of VIPs. Neither still do I have a proper communication channel with the Kickstarter team, and they have continued to reject my application to at least be listed as a Kickstarter Expert after helping raise $100M+ on Kickstarter in the last 3 years by being the only major agency that's building up the Kickstarter Follower systems.

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Meanwhile -- earlier today I was speaking to the CEO of Backerkit who had emailed me to supply a spreadsheet of their VIP Conversion rates to prove a 70% average conversion rate. The majority of projects in the spreadsheet had converted less than 100 VIPs. I do not believe a project that acquires 1 VIP and converts that single VIP into a backer (thus a 100% conversion rate) a meaningful datapoint in producing an average. That being said, yes, when factoring these projects that were not able to meaningfully utilize the VIP System, they did convert at 70% average. However, I cannot verify the authenticity of the spreadsheet, as I know major agencies are more than willing to filter and curate their data during displays to bump the average (I mean, who's gonna find out if they're lying? We all sign NDAs when we work at these big companies).

Another point of confusion in the email exchange was that the CEO claims that follows (which include past backer follows, account follows, project follows, and emails combined) convert at 38% into backers, and told me to look at the Followers-to-Pledges chart on Backerkit for their average benchmarks. So I checked it out. I saw that the 50th percentile was roughly 22%:

Backerkit's Average Visits-to-Followers Conversion Rate chart by Percentile

Backerkit's Average Followers-to-Pledges Conversion Rate chart by Percentile

After being alerted to actual information contained in these graphs, he says he will be updating them inside the Backerkit dashboard from 22% all the way to 38% at the 50th percentile to reflect their latest internal data.

In any case, it's notable that when combining users with Backerkit accounts with regular emails, the conversion rate into backers on these followers is a whopping 22% average. This is similar to Kickstarter Followers conversion rate and also VIPs conversion rates -- and why? As the Backerkit CEO just mentioned in his emails to me, the users who have accounts with Backerkit to follow creators are known to convert at substantially higher rates -- just like any system like Steam Wishlists, GameFound Followers, and Kickstarter Followers which require an account with the storefront to follow a project.

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Take it for what you will. A recent client also got $25 cost-per-VIP on Backerkit, and with 4000 Backerkit-Follows currently sits at 150 backers now 4 days into their campaign. While they had a 29% conversion rate of VIPs, the client feels most of VIPs came from their pre-existing large fanbase -- not the cold "follower" regular emails.

Somebody I know recently tried it with a very small campaign, and they had a 29% conversion rate within 24 hours. While it was less than 100 backers total, this is a surprisingly high conversion rate within 24 hours and quite a bit greater than using LaunchBoom's LaunchKit with Kickstarter or a third-party Shopify website, etc. which is normally 20% conversion within 24 hours and 30% by end of campaign.

Curious to know if anybody else tried Backerkit's new VIP system and what conversion rates of VIPs that they had by using Backerkit instead?

I've seen a number of questions lately on how to calculate the product pricing and costs associated with running a Kickstarter -- and this week I was helping both City of Sirens and Alarial's Blessing in planning their reward tiers, items, and costs per item -- I've figured it's about time to create a dedicated, streamlined method for doing this part of the campaign planning in a spreadsheet.

Let's get a discussion going on how to handle this task.

Designing Reward Tier Bundles

The first thing you likely want to do is plan out what items are included in each reward tier bundle.

In the below spreadsheet, see how the reward tiers are broken down by columns, and then the individual items contained in each reward tier bundle are broken by rows:

A reward tier and item chart using Google Sheets

(Shoutout to Marco Piana from Big Empty Blue for inspiration on the layout)

Calculating Landed Costs & Item Prices

It's important to view the landed cost per item unit (COGS), and then figuring a fair market price for each item. From there, you can calculate the MSRP price of the add-on items and reward tiers as whole -- and by using a percentage, the discounted reward tier price:

A detailed view of the retail pricing and fees per reward tier on Kickstarter

To elaborate on the MSRP price, it is best calculated using standard Keystone Pricing. The Keystone Price is how retailers will determine the product price for bulk Wholesale Pricing, and they are typically looking for a 50% discount from the MSRP (Keystone Price).

In essence, the Wholesale Price is typically 2x the COGS, and the Keystone Price is therefor typically 2x the Wholesale price.

(SIDE NOTE: big box retailers like Walmart will ask for merchandising deals as low as 30% to 20% of the MSRP, which leaves you very little after it's all said and done -- the key here to profitability is of course the massive scale of their bulk purchases)

There are a number of costs you will want to be aware of while calculating your Landed Costs, which are the costs associated up to the point of getting the product to your warehouse, such as:

• Cost Per Unit from the manufacturer
• Duties and Tariffs
• Inbound Freight per unit (2% is a safe estimate)
• Shipping to the warehouse or customer, weight of package ($7 for smaller items)
• Warehouse pick & pack fees ($1.25 for smaller items)

For the inbound freight per unit, you can use 2% as a safe estimate until your manufacturer and freight forwarding service (such as UPS, once it lands at the docks) can get you a better estimate once you are ready to actually place the final order.

The shipping to the customer can be estimated using EasyShip's shipping calculator.

Calculate the landed cost to figure the keystone price (MSRP) and wholesale price (Bulk pricing)

Make sure to backcheck the calculated keystone price against a fair market price for competitor products. If your keystone price is not within a 20% range of a fair market price, it's important to find a way to bring the MSRP back into this 20% range. This will ensure backers are not shocked by the price or hesitating on price alone.

Methods of reducing the Cost Per Unit or Landed Cost might include:

• Searching for different manufacturer quotes
• Choosing cheaper components
• Simplifying the product design
• Flat packing your product in the packaging box so that the customer themself assembles it
• Choosing a dedicated 3PL per shipping region if there are enough orders in a specific region to justify it
• Choosing a more efficient logistical chain for your material sourcing
• A freight consolidator service that puts your product alongside other products in a single cargo container
• Picking a more favorable tariff categorization

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For digital products, researching the fair market price is still incredibly important. Do you research using competitor product pricing to understand the fair market price for individual items. You can infer the fair market price of individual items on other Kickstarter projects by looking at the delta difference between their reward tier prices and the additional items included with each tier. For example, for a video game, you might see the base digital game key cost $30, while the next reward tier costs $40 for added Digital OST and Digital Artbook -- thus, the inferred fair market price for the Digital OST and Digital Artbook are $5 each.

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Calculating Cost Of Sales

Finally, you will want to calculate the Cost Of Sales in order to figure the final net margin on each individual unit item or reward tier:

• Kickstarter platform fees (5%)
• Credit Card Processing fees (3%)
• Returns, refunds, and cancellations (5% is a healthy ratio)
• Customer Acquisition Cost

Calculating the cost of sales for reward tiers

Product Packaging & Handling

For smaller creators, you may be just shipping the product to your own house for pick and packing, and you can source your large boxes from ULine, or smaller cardboard boxes on Amazon for even cheaper prices.

A 3PL Logistical partner can certainly make the process a lot easier, though, especially for large Kickstarter campaigns in excess of 1000+ orders, so I highly recommend hiring a 3PL partner in that scenario.

Some tips and tricks here might be to explore Flat Packing, where your product is broken down and flattened to reduce the size of the box + shipping container. Think of Ikea furniture, where the customer must assemble the product at home.

Pirate Ship is the most popular DIY service for postage, pickup and shipping: https://www.pirateship.com 

An important feature of Pirate Ship is SIMPLE EXPORT RATE shipping, which can save customers up to 50% OFF shipping costs internationally. However, the package must be under 4 lbs to receive this special discount. 

For small orders batches to international countries, this can be a huge saver!

(NOTE: Simple Export Rate will not be available on your Pirate Ship account until you first create an account and contact the customer service chat bot requesting it to be added to your account)

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Free Calculator Resources

I hope this part of the guide was helpful! I have the Reward Tier Worksheet available for free download, here:

https://prelaunch.marketing/products/reward-tier-planner

and the and COGS Calculator available for free, here:

https://prelaunch.marketing/products/cogs-breakeven-calculator

Another common thing I see mentioned is how to factor in the Development or Tooling costs into your Kickstarter. I recommend putting these costs aside from the per-unit costs, and instead apply them to your overall Minimum Funding Goal for your Kickstarter project.

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Communicating Shipping Costs

Now let's move forward to the presentation and programming of the reward tiers inside Kickstarter.

The first part I'd like to cover here is the presentation of the Shipping Costs. This is a crucial, often overlooked element that can substantially reduce the conversion rate of your Kickstarter Followers and VIP $1 deposits.

If the shipping costs are too high, as is common when shipping from Europe or Australia to other countries, you will often find the cancellation rate begins to exceed 5% and the end-of-campaign Kickstarter Follower and VIP conversion rates into backers can drop by 10% or more.

For projects that are only selling within the USA, you do not need to place shipping costs anywhere. Instead, consider baking the shipping cost into the product price.

However, for projects selling internationally, you should design a chart near the bottom of your Campaign Page which lists estimated shipping costs per country:

A shipping chart from a recent client, \"Dragon Buddies\"

Then add plain text below the shipping chart to clarify any international fees or VAT taxes for backers:

>International Shipping & Customs
For backers outside the United States, your country may charge import taxes, duties, or customs fees when your package arrives. These fees are set by your local customs agency and are the responsibility of the recipient.
Unfortunately, we aren’t able to control or pay these charges, and we also can’t communicate directly with customs offices on a backer’s behalf. If a package is delayed, held, or inspected by customs, the local agency will need to work directly with you to resolve it.
We’ll always do our best to provide accurate shipping information and documentation to help things move smoothly.

Shipping Costs For Add-ons

Now let's talk about shipping prices for add-ons, as this is the most common programming error on a Kickstarter's shipping details.

It’s very important to understand that the estimated shipping fees for add-ons will stack with the selected quantity of an add-on AND their selected reward tier. In many cases, the original reward tier's estimated shipping is a sufficient amount to ship them their rewards along with any small add-ons without having to charge additional shipping fees per add-on item.

For example, when the Add-on is set to $5 “estimated shipping”, and a user adds 10 units of the add-on to their shopping cart, the estimated shipping will be $50. For many types of add-ons, such as enamel pins, card decks, or other small items, an estimated shipping cost of $50 for 10 units makes no sense and consumers will refuse to purchase the add-ons. If they revisit their purchase later and discover this detail in their order, they may decide to cancel their entire pledge.

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Reward Tier Prices

Designing the prices of the individual reward tiers should be looked at as a whole. This "Price Ramp" can be likened to a rollercoaster ride, where the user gets excited to keep scrolling through the reward tiers.

Ideally, the backer’s journey down the pricing ramp is smooth and effortless. This allows their eyes to glide down the ramp, easily digesting the prices.

With a smooth ride, the potential backer will generally stop at the first tier beyond the limit of which they are willing to afford. After reading the benefits, they return back up a tier and begin the purchase process.

Example of a user's journey through a list of Reward Tiers, shown using a red arrow

When the prices are simple, particular changes in the digits and number of digits are what register in the reader’s mind while digesting the prices.

For instance, alternating 0’s and 5’s at the end of prices help signify differences and make tiers stand out.

Similarly, when an additional digit is added, they know the price has increased substantially and that it is a different level of tier.

Take the following ramp of numbers, for example:

>$16 → early bird
$20 → digital core package
$30 → early access + recognition
$45 → digital collector (KS exclusive DLC)
$60 → digital collector + physical core package
$85 → physical collector
$125 → all collector items
$300 → collaborate or retailer wholesale
$1000 → collaborate more

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Secret Reward Tiers

Now let's talk about Secret Reward Tiers.

A secret reward tier is a special link you can send for access to a special private reward tier that isn’t available publicly.

To set a reward as a Secret Reward, simply choose “Select backers only (Secret Reward)” for ‘Audience’ under the ‘Availability’ section when creating the reward. After the reward has been saved, you can go ahead and share the link.

Usage examples of Secret Reward Tiers include fulfilling VIP deposits, VIP add-ons, or even giving previous backers from past campaigns a special bonus in exchange for continued support.

How to set up a Secret Reward Tier using the Reward Tier editor on Kickstarter

If you have multiple secret tiers to give them, place each link inside the email to your VIPs.

EXAMPLE OUTREACH FOR SECRET REWARD TIER OFFER:

>EMAIL SUBJECT LINE:
[VIP DISCOUNT or VIP FREE GIFT] Inside!

>EMAIL BODY:
Hello!
Our new [product type], the [PRODUCT NAME], just launched on Kickstarter. It features [key differentiator] and [spotlight add-on].
I've prepared a special 10% OFF discount for all our [returning backers / VIPs]. You can select any of the secret reward tiers below, which are exclusive to [returning backers / VIPs] only (that's you!):
Tier Name #1 (10% DISCOUNT): [link to secret tier #1]
Tier Name #2 (10% DISCOUNT): [link to secret tier #2]
Tier Name #3 (10% DISCOUNT): [link to secret tier #3]
Be sure to check out the Kickstarter and let us know your feedback by replying to this email! Once again, without your support these projects would not be possible and I thank you from the bottom of my heart.
Best regards and happy [brand activity, ex. “journaling”],
-[Your Name]

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Kickstarter Follower Exclusive Gifts

You can also do Exclusive Bonus Free Gifts that are only applied to Kickstarter Followers only.

By offering a freebie for all your pre-launch followers on Kickstarter, it will incentivize them to follow your campaign. Place a banner near the top of the Kickstarter Pre-Launch Page:

An example of a Kickstarter Follower exclusive bonus free gift from a recent client, \"Porcus\"

Send a Project Update viewable for followers-only an hour prior to launch to inform them that they do not need to purchase any special add-ons with their pledge, and that their freebie will be automatically added to their pledge:

EXAMPLE OF A FOLLOWER-ONLY CAMPAIGN UPDATE FOR A FREE GIFT:

>CAMPAIGN UPDATE SUBJECT LINE:
Info About Your Pre-Launch Gift!

>CAMPAIGN UPDATE BODY TEXT:
[insert promotional image of spotlight freebie for pre-launch followers]
Hey there! Here’s the good news:
[Project Name] will be LAUNCHING in the next hour! The Kickstarter will go live this Tuesday, March 10th at 10AM EST.
Your early support is invaluable! As a pre-launch follower, when you pledge for any physical reward tier on our Kickstarter, you will automatically receive the [Free Gift Name] as a free gift added to your pledge after the campaign ends.
Your early support is invaluable! Back us today to bring this project to life!
-[Your Name]

After the live campaign has ended or at any point during the live campaign, use the Backer Report to select “Pre-launch follower” under the ‘Backer Type’ dropdown menu. Checkbox the entire list of backers, and then choose “Add free items” under ‘More actions’:

A visual tutorial on how to fulfill Free Gifts for Kickstarter Followers only

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Kickstarter Backer Exclusive Gifts

The best-converting, simplest and PR-friendly option, is to offer a Kickstarter Exclusive Reward for all backers.

Consider giving all backers an exclusive item, such as exclusive DLC digital content, collectible cards, etc. This helps drive incentive to become a backer:

An example of a Kickstarter Exclusive freebie for all backers from a recent client, \"Dragon Buddies\"

In this instance, all you have to do is simply add any free gift-item to each Reward Tier in the Reward Tier Editor.

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Reward Item & Add-on Ideas

Many times, creators want to keep their offering simple. While this is good for tech and regular physical products where consumers are primarily interested in an early-supporter discount, this is not effective for lower-priced products in the entertainment category such as Video Games, Tabletop and Board Games, Comic Books and Novels, etc.

For entertainment products, it's imperative to increase the average order value and provide exclusive goodies and collectible items -- not only to attract backers and give them a reason to support you instead of waiting later until the release of the product on regular storefronts, but also to make sure that any pre-launch marketing is worthwhile and profitable.

Here is a list of ideas to help brainstorm reward items and add-ons:

• Badge
  • A shoutout to their social profile(s) of choice (for high-price / collaborative reward tiers)
  • Premium Discord Channel / Badges / Name in Credits / Memorial Room
  • Your Message In-Game
  • Name plate customization or your name engraved on the physical product
• Bundles
  • Bundles of core items to share with their friends 
  • Expansion pack
  • Extra battery pack
  • All style upgrades
  • Wholesale multipack
• Digital Content
  • Exclusive DLC / Skin / Character / Equipment / Pet / Item
  • Desktop Wallpapers
  • Soundtrack / Artbook
  • Lifetime Service Access
• Collectible
  • Physical Box Copy (for video games, insert a key printed on paper inside the case)
  • Miniatures / Figurines / Papercrafts
  • Manual Handbook / Rulebook / Game Strategy Guide / Compendium 
  • Upgrade books from softcover to hardcover
  • Additional variations of Book / Comic cover options
  • Foil Stamping on book cover
  • Book Edging / Edge Printing
  • Developer-Signed Merchandise
  • Character Trading Cards
  • Original Signed Art
  • Tarot Cards
  • Plushie
  • Certificate of Authenticity
• Game Statements
  • Game-Branded Dice
  • Playing Cards
  • Play-Mat
  • Tokens
  • Card Sleeves
  • Mousepad
  • Coffee Mug
  • Drink Coaster
  • Magnets (fridge)
  • Postcards
  • Bookmarks
  • Journal 
  • Tote Bag
  • Stamps Washi Tape
• Art
  • Cloth Map
  • Calendar
  • Concept Art Posters
  • Concept Art Book
  • 300 Piece Jigsaw Puzzle of Cover Art
• Audio
  • Physical Soundtrack OST CD
  • Physical Soundtrack OST Vinyl
  • Piano Book
  • Audiobook of exclusive content (such as using murf.ai)
• Accessories
  • Pins / Sticker / Embroidery & PVC Patch
  • Keychains / Keyring / Acrylic Charms
  • Wallet
• Jewelry
  • Pendant
  • Ring
  • Earring
• Clothing
  • Shirts
  • Hats
  • Scarf

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Kickstarter's Pledge Manager & Reward Surveys

Last stop after the campaign ends are the Reward Surveys.

Reward Surveys are used to collect backers’ shipping addresses and any additional information you need from them to fulfill their order (such as choosing their preferred colorway or other bespoke customizations). 

To send out surveys, you can use Kickstarter’s built-in survey tool via the Pledge Manager located in the left main menu:

The Kickstarter Pledge Manager is located in the Creator Menu in the left panel

After initiating the Survey Setup process, Kickstarter will ask a couple questions about VAT and Shipping. In most cases, you will want to select “None of the Above” in regards to whether you have charged VAT yet:

Example of the Kickstarter Pledge Manager initial setup questions

If this is the case, you must then next select “I consent to Kickstarter collecting taxes from my backers”:

Example highlighting the checkbox for consenting to Kickstarter collecting taxes on your behalf

After answering the starter questions from Kickstarter, you will have access to the full setup screen for the Reward Surveys:

The main dashboard for Kickstarter Pledge Manager

For the Welcome Message, decide upon one or two actions that you want your backers to take, such as “visit our webshop for more”, “make sure to claim your free month on Patreon”, or “subscribe on YouTube for more content” and then include a URL link to that place.

EXAMPLE WELCOME MESSAGE FOR A KICKSTARTER REWARD SURVEY:

>“Thank you for backing [ProjectName]! We will need to collect some additional information to fulfill your rewards. Be sure to also visit our webshop for more collectible goodies, here: [link]”

For the Survey, you will ask questions related to any customization options on the tiers themselves. For example, if your product comes in white or black, you will want to insert a multiple choice question to allow them to choose. Their choices will appear as a separate column on the Backer Order CSV Sheet later on.

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Prepping The Backer Orders CSV Sheet For Your 3PL

After you've collected all the reward surveys, you may have additional questions about how to process your Backer Order CSV sheet for your 3PL partner.

The 3PL partner will often have an automatic tool for editing the CSV sheets to make it compliant with their systems.

If they don't have an automatic tool for you, you will just need to clean up your CSV sheet manually using a tool like Google Sheets to match the specs for your 3PL. They should offer you a template or guide on how to do this, and at the very least they will let you know their specifications.

For example, you will likely need to rename the Headers for each column after exporting the CSV file from Kickstarter, so you might want to import the Backer List CSV Sheet into Google Sheets prior to doing any other operations on the file.

To isolate various tiers or countries as needed for Regional 3PL Partners in Google Sheets, simply sort your sheet by Country and do simple cuts in groups of rows to a new sheet.

If they ask you to change the delimiter, simply right click and press "Edit" on your exported CSV file from Google Sheets, and then inside Notepad press "Edit" in the top menu and "Replace", then enter a ',' for a comma and replace it with the desired delimiter as requested by the 3PL.

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Closing Thoughts & Discussion

Let me know your thoughts, and looking forward to hearing your own methods of planning reward tiers, pricing, landed costs, COGS and shipping for Kickstarter campaign fulfillment!