There are so many ways that you can get your business up and running, especially in 2021. With eCommerce booming because of the COVID-19 pandemic, the question of the day has changed from “should I sell online” to “what’s the best way to sell online?”
In this post, I discuss the benefits of running a crowdfunding campaign before launching a product line via eCommerce. This way, we can evaluate which option is best suited to meet your business needs.
Think About Your Long-Term Goals First
When starting a business, getting funding is one of the first hurdles you have to clear. Getting your small business off the ground can be a huge expense – which is why you’ve come to CrowdCrux.
Not only is it expensive to start a business, but you are also not guaranteed to see a return on your investment. For a new small business owner, taking on risks with no guarantee of success is scary. Luckily, crowdfunding provides both a way to raise funding and a failsafe to protect you from investing time and money into a product that doesn’t appeal to people.
Don’t get me wrong, countless people start online storefronts and see major success with them. In writing this post, I am not trying to steer you away from creating a Shopify storefront. Rather, I am here today to encourage you to help you see the benefits of crowdfunding before launching a product by eCommerce.
The Benefits of Crowdfunding
Crowdfunding is a great method of bringing your product or service to life without pouring tons of money in the early stages.
The basic idea is simple: you make a good pitch, and create a campaign on a website like Kickstarter. If your pitch is strong enough to raise enough capital, you go to the next stage of your business. If it fails, no one’s card is charged and you don’t waste anymore money making a product no one wants.
Crowdfunding lets you mitigate financial risk. One of the most important parts of marketing is keeping your target audience in mind. Unfortunately, you can’t read their minds. Crowdfunding lets you see what happens when you pitch an idea to a large audience, allowing you to get feedback before you spend a lot of money on manufacturing or other business expenses.
You learn a lot about your audience. One of the coolest parts about crowdfunding is that you gather a lot of information about your target audience, as well as those that are backing your product. You get to know their likes and dislikes on a level that’s really hard to do any other way.
Beyond crowdfunding, it’s hard to collect this kind of active feedback. With all of this perspective from your backers, you are able to take into account suggestions they’ve made, and work to fine-tune your product to be the best version of itself it can possibly be.
This is very valuable if you are in the early stages of design or production. Even if the project doesn’t fund, the campaign will serve as a learning experience for you and your business.
Crowdfunding draws a lot of attention. There are two reasons for this. First, Kickstarter, Indiegogo, and other crowdfunding sites are very public. That means when you launch a crowdfunding campaign, you immediately draw more attention than you would launching your own website.
Second, in order to succeed at crowdfunding, you must build an audience. That will push you to create content, build a social media presence, grow your mailing list, and issue press releases. All of these things work a lot better if you give people an event to be excited about, and a crowdfunding campaign can be exactly that.
The Benefits of eCommerce
While I love crowdfunding, it’s not a perfect solution to all problems. For others, eCommerce might be the best pathway to success. Ecommerce is great because you can target very specific people from all over the world with very specific products. Additionally, customers can access your storefront anytime, from just about any mobile device.
On top of that, eCommerce, unlike crowdfunding, has no time limit. With a crowdfunding campaign, often, you are running this campaign over a set period of time, trying to raise as much money as you can during that period. You have as long as you need to get it right.
Lastly, while getting started with eCommerce can be an involved process, it can be easier than running a crowdfunding campaign. Preparing for crowdfunding can dominate your business if you’re not careful, specifically because of the time limit. You have to focus a lot of resources on something in a very short time.
3 Options to Proceed
Based on the benefits of crowdfunding and eCommerce, there are three basic ways you can establish a business:
- Run crowdfunding campaigns and never launch to eCommerce
- Launch to eCommerce and never run crowdfunding campaigns
- Run crowdfunding campaigns first, then launch on eCommerce later
Here’s how each of these paths broadly pan out.
Option 1: Crowdfunding Only
Some products are temporary and fade away quickly. If you want to make only a single run of a product, then it might be worth pursuing crowdfunding only, with no plan to go to eCommerce afterward.
Additionally, you may start a crowdfunding campaign with the intent to see how interested your audience is in a product. If you barely meet your funding goal, you may opt not to launch your product by eCommerce since it would likely not be successful. This saves you time to move onto the next business opportunity.
Option 2: Straight to eCommerce
Similarly, crowdfunding isn’t right for every business. It takes a lot of work and sometimes it is truly easier just to launch a product via eCommerce. Make the product page, run some ads to Shopify and Amazon, call it a day.
Many businesses stay away from crowdfunding entirely and go straight to eCommerce. Sure, you may have to commit fully to paying to create a product, but for many entrepreneurs, this is more attractive than dealing with crowdfunding.
Option 3: Crowdfunding First, eCommerce Later
Finally, there is one last option. You can always run a crowdfunding campaign first, and then launch to eCommerce later. It takes the most work, but in some ways is the best of both worlds.
Imagine this. You start with a crowdfunding campaign for an idea you’re not sure about. By running a campaign, you are testing the waters before committing to expenses like manufacturing.
If the campaign goes really well, then you both successfully mitigated your risk, raised a lot of money, and drew a lot of attention. You may even have a loyal audience now! That means when it’s time to start selling your product by eCommerce in the long run, you already have a head start!
Final Thoughts and Recommendations
Think about your business goals before you decide how to proceed. Crowdfunding and eCommerce are both tools, and you can use either of them or both of them in unison to succeed. Personally, I’m a fan of crowdfunding first, and launching on eCommerce afterward!
Need help fulfilling orders for your online store or crowdfunding campaign? Request a quote from Fulfillrite today.
Pierson Hibbs is a marketing consultant for Fulfillrite. His main areas of expertise are digital marketing and audio production. He also writes for the Marketing is the Product blog and cohosts the Marketing is the Product podcast.
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