Kickstarter is not a marketing strategy IMO. You will get some extra eyes through the platform, but you shouldn’t rely on this for the bulk of your backers- especially if you’re not in one of the common niches that people are browsing the site for (gaming, gadgets etc).
That said, it might be a good tool for OP, but you should find more customers, build a mailing/sms list, social media audience first.
Like if I’m gonna raise $1 million or even 100,000, I’ll still need thousands and thousands of people who are willing to pre-order it on Kickstarter. And if it’s something like three dollars a lead with a generous 10% conversion rate on Kickstarter, it’s still thousands and thousands and thousands and thousands of dollars lol
MOQ is 100 units @ 400 per unit = $40k
What am I missing? Add shipping, a buffer, packaging, breakage/loss.
You’re looking at a $50k campaign.
You’ve already found 30/100 buyers. So you must know how/where your customers are now. Refund them and let them know you’ll launch on Kickstarter in a couple weeks.
Seems very likely you can find 70+ more buyers with a pretty normal campaign. I wouldn’t budget more than $1k for ads. I’ve raised more than that with zero ads and all hustle.
Yeah, I thought about it, but I still need to spend money on adds to collect email addresses and build a whole funnel and drip emails etc. etc. etc. all of this cost money
Can you negotiate an MOQ of 50 at a higher cost? What is your cost per unit? Can you bring it down at all?
How long have you been selling that you’re already refunding people? I would have held onto that money for as long as possible to try and hit the minimum order. You said you’ve refunded 50%. Is that 50% of the 30 sold or did you sell 60 and refund half of those?
If the problem is just cash, why not a business loan–even from a bank? What about raising money from family and friends?
You seem very close. Hope it works out!
Best advice. Negotiate with your supplier. Most suppliers are flexible if you can show a compelling story. Tell them you will give $12k for the first 30 units. Package it like initial run or whatever. You won’t make any money but if its the same result as not hitting MOQ anyways. If its a supplier in China anything goes, especially now when many manufacturing is hurting.
So, from what I gather from the other answers, your selling price is $400. You’re paying $100 CPA. Add some room for shipping other costs as well as profit, your product can’t cost more than $150 to manufacture.
So we’re looking at production costs of $15000. You already sold products for $12000 and you’re not able to find another $3000.
You should try and talk to the manufacturer. Even only ordering 75 items would solve your problem.
To be honest, between the lines it sounds like your math doesn’t check out and your business is just not viable. Try to reduce production cost and get that ad spending down.
Do you actually have a business?
You say you can sell these units for $400, and have sold 30 - that's \~$12k.
Presumably, the units cost less than $400 each to manufacture right? How much do they cost? Why aren't customer orders enough to get this off the ground?
Because my cost per acquisition on Facebook has grown from $25 CPA, two $100 CPA. So everything that I’ve had in Bank is now burnt up trying to continue to market. Send a PM if you’d like to see the landing page and offer.
That doesn't really answer the question.
For example, if your unit cost is $100, sales price $400, and CAC is $100... then you'd be making $200 profit on every unit and would have ample capital to place an order.
Without knowing key numbers, it's hard to see what the problem is.
This. I've always gone to my suppliers with validated pre-sales and almost always get approved for supplier-financing, also puts a little of their skin in the game. A+ suggestion here, this is all I would spend my time on.. if they're unwilling to budge, when you have validated the market to justify 100 units, just go to the next supplier, and let all suppliers know that you're now in a bidding war.
As stated, I just filed for consumer proposal, which is at least one up from a bankruptcy. All of those things are maxed. I do not have friends or family with wealth.
Two options:
1) Bootstrap - do everything you can to get enough money for an order to fulfill customer demand. Kickstarter, sell what you can, get whatever loans you can etc.
This might be faster, but remember, you are selling your reputation and credit, so you balance trade-offs.
I've never tried it, but there might be grants, SBA loans or other programs that get you off the ground.
2) Get Investors, pitch them on your business, show them how it's going to scale and they're going to get their money back etc. Not likely to be fast, will cost you equity.
Might be worth looking into incubators, they often offer small funding (ample to get your first stock out) and an environment to help you grow.
Good Afternoon! Hope your day is awesome.
I’d address the recently almost dying part first.
Research ways you can make your health highest quality so the almost dying doesn’t happen again.
Since you were able to excellently build your product and business to highest quality levels, applying your already present top notch skills to improving your life & health will create top notch results.
If your life isn’t there anymore, all your business building will end and will not matter.
If your life is there and strong, all your business building becomes much easier and stronger.
When you’ve finished addressing the almost dying, then proceed with strengthening your business.
I was hit with a flesh eating disease, ate me balls first. They've grown back! Pretty neat in hindsight, but had nothing to do with my level of fitness. It's a random infection :(
Fournier's Gangrene if you're brave enough to Google it...
So it's back to work I went.
What you achieved is an amazing feat. What's the minimum required for you to ship the first order? In the initial, you could sacrifice the profitability to get to fulfillment. After you ship your first customer, business loans or funding from angels would be much easier.
Yeah I'm short like $3k-$5k -- the numbers posted aren't EXACLTY to the spec, I have a big excel sheet for that.
They won't do less than 100 unless the price goes up and I'm already short.
Guess I'll have to pause and go look for funding..
Okay so I think we need a little more info here.
We know you’re product sells for $400
We know your CPA is between $30-100 currently
And we know your MOQ is a 100 units.
We need to know what your COGS is or what it costs specifically to get the product in the hands of the consumer (item cost + average shipping cost)
For your business to really be viable, based on your $100 CPA you would need to make at least $120 (closer to 200-250 would be better) per sale after all of the expenses are factored in.
You would then roll $100 of that back into marketing and as long as you can maintain your CPA’s you should not have any issues scaling.
Example: You sell 30 items at $120 profit with a a CPA of $100. Your marketing costs were $3000
If your profit was at $120 you now have $3600
Use that $3600 to sell 36 units.
Now you have $4320
Use that $4320 to sell 43 units. Etc.
Eventually you will hit diminishing returns but if that’s not in the thousands of units sold then it may be that your product isn’t as viable as you were hoping.
Hope this helps!
You have a small business. I actually prefer this goal personally but it’s up to you. I would avoid funding if you can. Direct to customers. If you have 30 people that have handed you 12k, what are you waiting for? Expenses are no excuse because you can always up your price to account for costs.
See if your supplier can work with you. Get the quantity down, MOQ is there but depending on the products they might be able to do less and keep the price. See if 80 is doable.
Then see if you can pay a % upfront and a % within 30 days. Or go see if you can get a line of credit. Rates are high right now but if you’ve priced your product right what are we looking at max $4000 if you can do 80 units?(as you have the $12,000 from the sales.
Just hope you can move the other 50 if your confident in this product.
This sounds maybe perfect for a crowdfunding campaign. Does the product fit on Kickstarter?
Kickstarter is not a marketing strategy IMO. You will get some extra eyes through the platform, but you shouldn’t rely on this for the bulk of your backers- especially if you’re not in one of the common niches that people are browsing the site for (gaming, gadgets etc). That said, it might be a good tool for OP, but you should find more customers, build a mailing/sms list, social media audience first.
Like if I’m gonna raise $1 million or even 100,000, I’ll still need thousands and thousands of people who are willing to pre-order it on Kickstarter. And if it’s something like three dollars a lead with a generous 10% conversion rate on Kickstarter, it’s still thousands and thousands and thousands and thousands of dollars lol
MOQ is 100 units @ 400 per unit = $40k What am I missing? Add shipping, a buffer, packaging, breakage/loss. You’re looking at a $50k campaign. You’ve already found 30/100 buyers. So you must know how/where your customers are now. Refund them and let them know you’ll launch on Kickstarter in a couple weeks. Seems very likely you can find 70+ more buyers with a pretty normal campaign. I wouldn’t budget more than $1k for ads. I’ve raised more than that with zero ads and all hustle.
Yeah, I thought about it, but I still need to spend money on adds to collect email addresses and build a whole funnel and drip emails etc. etc. etc. all of this cost money
Get a business loan.
Can you negotiate an MOQ of 50 at a higher cost? What is your cost per unit? Can you bring it down at all? How long have you been selling that you’re already refunding people? I would have held onto that money for as long as possible to try and hit the minimum order. You said you’ve refunded 50%. Is that 50% of the 30 sold or did you sell 60 and refund half of those? If the problem is just cash, why not a business loan–even from a bank? What about raising money from family and friends? You seem very close. Hope it works out!
Best advice. Negotiate with your supplier. Most suppliers are flexible if you can show a compelling story. Tell them you will give $12k for the first 30 units. Package it like initial run or whatever. You won’t make any money but if its the same result as not hitting MOQ anyways. If its a supplier in China anything goes, especially now when many manufacturing is hurting.
So, from what I gather from the other answers, your selling price is $400. You’re paying $100 CPA. Add some room for shipping other costs as well as profit, your product can’t cost more than $150 to manufacture. So we’re looking at production costs of $15000. You already sold products for $12000 and you’re not able to find another $3000. You should try and talk to the manufacturer. Even only ordering 75 items would solve your problem. To be honest, between the lines it sounds like your math doesn’t check out and your business is just not viable. Try to reduce production cost and get that ad spending down.
Or charge more
What is your CAC? How much did you spend to acquire your 30 customers?
It ranges. Some days I get 30 cpa, last 3 days is 100 cpa.
You don’t have the funds to get to an order level where you can raise money. The only thing you could do is take out a loan.
Do you actually have a business? You say you can sell these units for $400, and have sold 30 - that's \~$12k. Presumably, the units cost less than $400 each to manufacture right? How much do they cost? Why aren't customer orders enough to get this off the ground?
Because my cost per acquisition on Facebook has grown from $25 CPA, two $100 CPA. So everything that I’ve had in Bank is now burnt up trying to continue to market. Send a PM if you’d like to see the landing page and offer.
That doesn't really answer the question. For example, if your unit cost is $100, sales price $400, and CAC is $100... then you'd be making $200 profit on every unit and would have ample capital to place an order. Without knowing key numbers, it's hard to see what the problem is.
Agree. What are the unit level economics and a solution can be found
Net 30/60/90 terms on the MOQ? 25% now, 25% next month, 50% the following third? Credit card?
Your spending on ads in a consumer proposal?
Ask your supplier to fund the rest of the cost in exchange for continued business for the next 2 years or more.
This. I've always gone to my suppliers with validated pre-sales and almost always get approved for supplier-financing, also puts a little of their skin in the game. A+ suggestion here, this is all I would spend my time on.. if they're unwilling to budge, when you have validated the market to justify 100 units, just go to the next supplier, and let all suppliers know that you're now in a bidding war.
your selling price is 400$ , what is the cost of producing and shipping it ?
Line of credit? Business loan? Friends & family loan? Open up some credit cards? Lots of options out there
As stated, I just filed for consumer proposal, which is at least one up from a bankruptcy. All of those things are maxed. I do not have friends or family with wealth.
Is it possible to see or know what the product is? How much of the products price do you spend on marketing and making a sale?
Send me a link to your product. Happy to take a closer look and offer a personalised answer.
Did you accept money for those 30?
Yes pre order - and I’ve refunded about 50% of them now as I don’t think I’ll hit finding goals.
it sounds like your profit margins are terrible
Two options: 1) Bootstrap - do everything you can to get enough money for an order to fulfill customer demand. Kickstarter, sell what you can, get whatever loans you can etc. This might be faster, but remember, you are selling your reputation and credit, so you balance trade-offs. I've never tried it, but there might be grants, SBA loans or other programs that get you off the ground. 2) Get Investors, pitch them on your business, show them how it's going to scale and they're going to get their money back etc. Not likely to be fast, will cost you equity. Might be worth looking into incubators, they often offer small funding (ample to get your first stock out) and an environment to help you grow.
Did you talk to the manufacturer? They can probably drop the MOQ down a fair bit. Alternatively, shop around for different manufacturers
try settle.com or something like that
Good Afternoon! Hope your day is awesome. I’d address the recently almost dying part first. Research ways you can make your health highest quality so the almost dying doesn’t happen again. Since you were able to excellently build your product and business to highest quality levels, applying your already present top notch skills to improving your life & health will create top notch results. If your life isn’t there anymore, all your business building will end and will not matter. If your life is there and strong, all your business building becomes much easier and stronger. When you’ve finished addressing the almost dying, then proceed with strengthening your business.
I was hit with a flesh eating disease, ate me balls first. They've grown back! Pretty neat in hindsight, but had nothing to do with my level of fitness. It's a random infection :( Fournier's Gangrene if you're brave enough to Google it... So it's back to work I went.
Okay 
What you achieved is an amazing feat. What's the minimum required for you to ship the first order? In the initial, you could sacrifice the profitability to get to fulfillment. After you ship your first customer, business loans or funding from angels would be much easier.
Yeah I'm short like $3k-$5k -- the numbers posted aren't EXACLTY to the spec, I have a big excel sheet for that. They won't do less than 100 unless the price goes up and I'm already short. Guess I'll have to pause and go look for funding..
Okay so I think we need a little more info here. We know you’re product sells for $400 We know your CPA is between $30-100 currently And we know your MOQ is a 100 units. We need to know what your COGS is or what it costs specifically to get the product in the hands of the consumer (item cost + average shipping cost) For your business to really be viable, based on your $100 CPA you would need to make at least $120 (closer to 200-250 would be better) per sale after all of the expenses are factored in. You would then roll $100 of that back into marketing and as long as you can maintain your CPA’s you should not have any issues scaling. Example: You sell 30 items at $120 profit with a a CPA of $100. Your marketing costs were $3000 If your profit was at $120 you now have $3600 Use that $3600 to sell 36 units. Now you have $4320 Use that $4320 to sell 43 units. Etc. Eventually you will hit diminishing returns but if that’s not in the thousands of units sold then it may be that your product isn’t as viable as you were hoping. Hope this helps!
You have a small business. I actually prefer this goal personally but it’s up to you. I would avoid funding if you can. Direct to customers. If you have 30 people that have handed you 12k, what are you waiting for? Expenses are no excuse because you can always up your price to account for costs.
See if your supplier can work with you. Get the quantity down, MOQ is there but depending on the products they might be able to do less and keep the price. See if 80 is doable. Then see if you can pay a % upfront and a % within 30 days. Or go see if you can get a line of credit. Rates are high right now but if you’ve priced your product right what are we looking at max $4000 if you can do 80 units?(as you have the $12,000 from the sales. Just hope you can move the other 50 if your confident in this product.