SMALL BUSINESS GROWTH | 8 minute read
Kickstarter is a great crowdfunding platform for budding entrepreneurs with a good idea but not enough capital to design and build a product.
With over 150,000 projects launched on the site to date, nearly half of them have reached their funding goals, totaling some $630 million in total pledges. Most of these brands wouldn’t exist without Kickstarter.
Take Misen, for example. Described as the “Holy Grail of Knives”, Misen’s signature chef’s knife came into being thanks to a 2016 Kickstarter campaign that raised over $1 million in pledges. The company is still going strong and has expanded to incorporate a full range of kitchenware.
Then there’s the lifestyle watches and accessories brand MVMT that raised more than $200,000 on Kickstarter-esque crowdfunding website Indiegogo back in 2013. Today, the company has a global community of more than 1.5 million MVMT watch owners and was recently sold to Movado Group for $100 million.
Despite these success stories, many crowdfunded businesses fall short of their promises after receiving funding. You have the pledges; what’s next? For most new companies, designing and manufacturing a product, then getting it into the hands of consumers, is a complex and daunting process.
If you’re considering going down the Kickstarter route, here are some key considerations to make sure you’re ready to get the ball rolling once you’ve secured funding.
Your manufacturer is responsible for converting your design into its final form, which means they play a large part in whether you bring to market a successful product, or fall short of expectations. As such, the way you go about selecting your manufacturer, and how you invest in building your relationship with them, is crucial. If you’re planning to use an external manufacturer, do your research and ask the following questions to every prospective manufacturing industry partner:
The other option is to handle manufacturing in-house. Although this requires some overhead investment, it can end up being a more cost-effective avenue for businesses that produce low volumes or highly customized products. Some of the advantages of in-house manufacturing include:
Regardless of whether you choose to outsource or manufacture in-house, it’s important to put serious consideration into what your manufacturing approach will look like before you seek funding. This includes:
Let’s say the first batch of your product has been built offsite and needs to make its way to your warehouse before being shipped out to customers. The question is: what is the most cost-effective and efficient way to ship hundreds or even thousands of products? There are two main options:
Hire a third-party logistics company (3PL) – One way to handle transportation of your end products is to hire an experienced third-party company that specializes in logistics. This option tends to be more expensive but frees you from the responsibility of handling yet another logistical component of the business. However, it’s worth noting that 3PLs can put you at risk of delays or other operational obstacles that you don’t have control over.
Handle transportation yourself – The other option is to cut out the middleman and go through UPS or another shipping provider directly. It means extra legwork for your team but after familiarizing yourself with shipping processes and costs, you might find that this route is not only cheaper but also gives you a greater degree of flexibility.
Keep in mind that as you’re building a reputation for your product, you want to make sure that the customer experience is as flawless as possible, so it’s important to choose a shipping method that can support timely order fulfillment.
Efficient order fulfillment is critical for any new product on the market, yet many businesses still struggle with getting it right as a result of three concurrent forces:
The explosion of order and delivery channels – making sense of the myriad options out there and finding the best solution to find an individual business’ needs is no easy feat – especially as the range of choice grows by the day.
The complexity of global supply chains – managing orders and picking, packing and shipping goods becomes exponentially more complex when doing business globally.
The rising expectations of customers – as customers increasingly expect a higher level of service at every touchpoint, businesses face pressure to provide faster and more personalized order fulfillment to maintain a competitive edge.
This is where automated order fulfillment comes in to save the day. Utilizing smart order fulfillment solutions like TradeGecko enables you to centrally manage a complex web of working parts more cost-effectively and accurately, and to trigger key stages in the fulfillment process automatically, cutting down on the need for manual labor. By choosing an order fulfillment system with automation capabilities from the outset, you’ll be laying the groundwork for an efficient end-to-end manufacturing and fulfillment cycle as your business evolves.
In the era of lean manufacturing, projects are typically time-, cost- and quality-sensitive, leaving little room for delays. Manufacturers that can’t deliver on their promises because of a supply chain stall risk losing significant potential revenue and profit. By fine-tuning your supply chain management processes, you can expect:
Improved operational efficiency
Supply chain automation is more efficient, accurate, and cost-effective than manual labor. Catch.com.au, for example, reduced their number of pickers from 60 to 4 by automating their storage and retrieval processes – cutting their order cycle time in half. Similarly, luxury eyewear, jewelry, and accessories brand Philippe V has reduced admin time on orders by over 80% using TradeGecko for automation:
Before TradeGecko, we estimate that the sales agent as well as the seller's admin were spending about 20 to 30 minutes inputting the order, including the customer address and the terms and conditions as well as the SKUs. Now with TradeGecko, we estimate it takes less than 5 minutes to input the very same order. So this is a really huge gain in time for the company as well as for customers.”
Improved customer experience
Reducing the time between ordering and fulfillment has a direct impact on customer satisfaction. Automation keeps customers updated on order statuses in real time, and enables businesses to better serve customers.
Improved inventory management
Automated supply chain processes lead to be better inventory and order tracking , decreasing stock discrepancies and improving demand forecasting. With smart automated reporting, you can make informed decisions about where to invest and improve your business.
Increased transparency between business and customer
Transparency lays the foundation for trust with customers. An automated online ordering system produces more than just an electronic invoice – it is a point of communication that businesses can use to provide updates to customers during the entire order management and fulfillment process.
With careful planning and investment in each of the areas above, any manufacturing business will be in a good position to build and deliver a product successfully. In our upcoming blogs, we’ll talk more about creating a Bill of Materials and the manufacturing process to help you turn your product idea into a reality.
