Running a board game Kickstarter campaign – Part II

In our previous post about running a board game Kickstarter campaign (part I) we talked about having an idea concerning a board game and how you proceed through a beta version of your board game.

In this post we going to take a closer look on manufacturers and the Kickstarter back office stuff.

After you have managed to get a beta version of your game, you should start considering manufacturers for your board game. This is really important for setting the right price for your game. When you know how much it costs to produce your board game, then you can start thinking about the retail price. Or the way around: Think of your games price point. Look for other games similar in components and style and how much they costs. It is no shame not to be cheaper than other publisher, but you have got to make some points in quality to make your price reasonable.

With CitiesUP we had so many ideas and features, which we wanted to be in the game. But when it comes to manufacturing, especially in small quantities, you will soon realize that some features are just simply not possible.

Another thing you should absolutely aware of: You will invest money in components to see their quality before you even start collecting any buck. This will not be thousands, but a couple of hundreds of dollars. So be prepared.

You can search the web for board game makers and will find out, that there are a lot of them. Think of producing in the US, EU or Asia. Considering where you are situated, maybe it could be wise to produce there. Think of customs controls and fees. You can produce your game in Asia. These companies are mostly situated in Hong Kong. They offering a good quality for a fairly price. You can also go local to support local manufacturers. 

We decided to use components from the US and Germany. We figured out, that even if we would produce in Asia, the components, shipping and customs fees would not be that different. But this really depends on your games components. Talking about components: Be honest to your backers about your components quality. If not, it will backfire to you.

So order some components from different manufacturer, look at the different qualities, compare their pricing and think about the quantity of copies you want to offer at Kickstarter.

When it comes to Kickstarter it gets more economical. 

When you start to think about the price point of your game, just lets say it is $50, and the quantity you can produce and want to sell, say 100 copies, you would make that calculation:

$50 x 100 = $5000 (Earnings)

This means, you are going to make $5000 if you sell 100 copies.

These $5000 are not your profit! You manufacturing cost, let us say $30/copy, must be calculated as well.

$30 x 100 = $3000 (Manufacturing Costs)

So know you think:

Earnings - Manufacturing Cost = Profits

This would mean:

$5000 - $3000 = $2000 (Profit)

WRONG!

This is absolutely wrong. 

Know it gets complicated. But it is necessary to have this in mind when you start to think about your earring, costs and profit.

This is how setting a Kickstarter campaign works:

You think about the amount of copies : 100

You think about the price point: $50

In this example we operating with just one backing option ($50).

When you enter the price point, Kickstarter will ask you, to enter shipping options. Say you enter $5 US.

Then Kickstarter asks you to enter a campaign goal. This means, if you reach that amount of money, your campaign is successful funded and you will produce it.

So if you say you want to sell 100 copies for $50 each and set the campaign goal to $5000 you must think about that:

Kickstarter is putting the costs for the Kickstarter copy pledge ( the $50) and the shipping costs (US $5 ) together. So every pledge is worth $55 in our example for US shipping. 

This means, your campaign will be funded after 91 copies are sold ($5000 / $55 = about 91 copies). If you will sell all 100 copies with US shipping (e.g. $5), your campaign will end with $5500.

Sounds great ! Well...

Kickstarter is not operating for free. This means you have to pay Kickstarter if your funding is successful. Kickstarter wants about 3% + 2% for transactions partner.

This means 5% of your funds will not be transferred to your bank account.

In our example this would means, you will get $5225 (5%= $275).

So you got $5225 in funding for 100 games. This makes $52.25 each. Remember the $55 price tag? You get $2.75 less. That is totally ok, because Kickstarter is giving your a great opportunity. But you have to consider this, when you set the price point. Because the shipping costs ($5) and the manufacturing costs ($30) will be the same.

This results to:

$5500 (funding) = 100 x $55 (each copy) + 100 x $5 (shipping)= $5500 (earnings)

-$3775 (costs) $100 x $30 (manufacturing costs) + 100 x $5 (shipping costs) + 100 x 5% ($2.75)

_____________

=$1725 Profit?!

Are these $1725 my profit? Simple: NO.

Now think about everything else:

- marketing costs

- beta development costs

- free copies for reviewers

- maybe salaries

- workspace

- website / webshop / domain / presentation / photos

- ...

In our next post we will take a closer look at these additional costs and will discuss how they affect you actual profit.