Nathan Hansen Games

When I got into the game business, I decided to start by working for others so I could learn how to run a company so I could one day run my own. I think mentally I'm ready to make that shift. Financially is another matter entirely.

So I've been thinking about doing a kickstarter to raise capital. It almost seems like a no brainer these days. You have a game, Kickstart it! Make some money! Repeat as necessary. Of course it's never that easy, and I've read enough stories online about people ultimately losing money from kickstarters in the process of fulfilling them that I'm certainly not going to act rashly.

So while looking into costs I keep wondering what I'm missing. I have a quote for my game Draftcar which includes DDP. Which is awesome. Basically DDP means the quote covers the cost of the game and all freight/import fees associated with getting the game in hand. So I have a landed cost per unit. It may be cheaper if I covered this stuff seperately but I'm fairly sure I'd be more likely to miss something then the printer since they've done this before, and then it would certainly end up costing me more so I figure even it is slightly more expensive to have them handle the freight it's likely very worth it.

Units
cost per unit
Total
DDP
DDP per unit
Total Cost
Actual per unit (LANDED)
min MSRP
(Landed x5)
1000
$2.78
$2780.00
$1680.00
$1.68
$4460.00
$4.46
$22.30
2000
$2.24
$4480.00
$1745.00
$0.87
$6225.00
$3.11
$15.56
5000
$1.95
$9750.00
$2980.00
$0.60
$12730.00
$2.55
$12.73

Based on the above, my minimum Goal should be $4460. And I'm thinking the backers should get the game for $15 with MSRP ultimately determined by the size of the print run but guaranteed to not be less than paid by the backers. To me price points like $22.30 feel weird as well so that would get rounded up to $24.99 if I could only get 1000 units printed. Likewise at 2000 units the price would round up to $19.99 and at 5000 units the price would be $14.99 (basically the same as the backers).

But of course that leaves a few things out. Like actually shipping the game to people. And the portion that Kickstarter and Stripe take. For Kickstarter and Stripe's take the obvious solution is to just increase the goal to cover them. A safe value would probably be $5000.

The trickier solution is the shipping. If I have backers pay extra for shipping while on Kickstarter I will have to raise the goal to account for a portion of the money raised not being for manufacturing, but instead for shipping. Which if I underestimate could lead to my business failing before it really starts. To be safe here I'd probably have to at least double my goal.

The other options is to charge backers shipping when the game actually ships to them. This is safe in that they would actually be charged what it costs me but I worry that since it involves being charged after the kickstarter, backers will feel that I'm gouging them if I do that. Especially since in many international locations the shipping may end up being more that the cost of the game and they had already payed me when they backed. Even so, this is probably the smart way to go as it means a lower and therefore easier to reach goal. And assuming I am very forthcoming that shipping would be charged later I think most people would be ok with it.

The other expense I know I need to figure out business licensing. Particularly if I want to have product in international warehouses, which I probably would if I could as that would lower the shipping cost to international customers, which could potentially translate to increased sales.

Written by Nathan Hansen — March 26, 2016

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