Using Amazon Fulfillment to Ship your Kickstarter Product (Part 2)

I Kickstarted a card game and decided to use Amazon to handle my fulfillment. Why’d I do it? What problems did I run in to? Would it work for you?

Part 1: The Basics

Part 2: Accurately Estimating the Shipping and Fulfillment Costs of Your Kickstarter Project

“Accurately Estimating” is an oxymoron. Not pursuing an accurate estimation of your shipping costs is moronic. You see – everything is connected.

Estimating the cost of shipping your product is annoying, obscene, and generally swept under the rug. Some would say it’s the number one thing that Kickstarter creators screw up and lose a bunch of money on.

fulfillment-map-colorcorrected

After funding my Kickstarter, I mapped out all of my shipping options and costs on my whiteboard at home. Note that I said “after my Kickstarter.” Don’t be like me.

Since then, I have successfully shipped my games to each of my backers and have gained a much better understanding on how much things cost. In this article, I am going to help you draw out your own cost map and it will be much simpler than mine.

Step 1: Two Starting Points

I’m going to cover two options for fulfillment in this blog post: DIY (shipping from your house) vs Amazon Multi-Channel Fulfillment (shipping from the Amazon warehouse). I haven’t worked with any other 3rd party fulfillment centers and while some of these factors may align, I cannot speak for certain about the various costs and fees of those other services.

I am not going to include the cost of getting the games from your manufacturer to you or to Amazon. Later, make sure to get quotes from your manufacturer to see if there is a difference in shipping from one location to the other. For me, the cost was the same.

basic_flow_3

Step 2: Calculate the cost to ship one of your items

First things first, get the weight and dimensions of your product – or at least a good guess. Here are my game’s measurements:

whatoh_box_dimensions

Shipping Items Yourself

Let’s narrow down which packaging will work best for you. We will first check out flat-rate USPS boxes and then custom-sized boxes.

USPS Flat-Rate Shipping

In short, flat-rate means that neither your product’s weight nor where you ship it matters; the price will not change. Here’s the selection of USPS flat-rate boxes:

usps-flat-rate-graphic

The above dimensions are the inner dimensions, so you can accurately tell if your product fits in the box. (Outer dimensions are 1/8th of an inch longer, just so you know).

Figure out the smallest one that your item fits into and then record the corresponding prices for domestic and international shipping.

For the game makers reading this, it is actually a “thing” to size your game box to fit into one of the above boxes. I’ve seen a number of smart Kickstarter creators size their game to fit right into the small USPS flat-rate box to ensure a great shipping rate. (For example, Slash and Boss Monster)

Additionally, the actual cardboard boxes for these are FREE. You can just pick them up from the Post Office. However, consider this poem.

To avoid stern sighs | and emptying your post office’s supplies | order boxes from the USPS site | which is also free.

Custom-Sized Shipping

Here’s a link to ULINE, a website that specializes in custom box sizes. Scroll towards the bottom of this page to where you can ‘search by size.’ Find a box that fits the size of your product the best.

Record the per-box cost of, say, 500 boxes. It was about .35 cents per box for me.

You may be wondering why I made you do that extra work for such a small cost. One, because every dollar counts and two, to make sure you know how easy it is to order custom-sized boxes. I shipped out around 30 of my games in ~$12 flat rate boxes before I realized that it would cost much less to ship in custom-sized boxes.

Now check this USPS site to calculate shipping for your package. To get a nice estimate, you’ll want to check two zip codes: the first one should be very close to you and the second should be very far. I live in Atlanta, so I chose another Atlanta zip code for my first choice and a California zip code for my second. (In my opinion, you shouldn’t worry about Alaska and Hawaii).

After putting in a destination zip-code and shipping weight (shipping date shouldn’t matter), select ‘Package’ in the second row of shipping choices and then hit ‘Continue’. On the next page, select Priority Mail Options and then look at Priority Mail 2-Day. That should be your cheapest option. I’ve highlighted it below:

highilight-cheap-priority-mail

Small rant: You’ll notice that there is a ‘Price’ and an ‘Online Price.’ I tried my damnedest to use USPS online shipping. I downloaded tools, tried the online website, but it just wouldn’t work. I think I shipped / printed labels for 5 packages before it would no longer accept my credit card. After researching more, it seems that very many people were having the same issues and they have not been fixed yet. I encourage you to try it yourself as you may have better luck, but for this post I will assume you are not shipping with the USPS online prices.

Average the cost of shipping to both zip codes. Add the ULINE cost-per-box to that price and write it down. Now do all of that again with calculations for shipping your product to Canada, Europe, and Asia.

Having fun yet?

This is just a hint of the work needed to make your Kickstarter campaign successful. It’s all worth it to make your dream come true.

You now have the DIY price for flat-rate shipping vs custom-sized box shipping! Go ahead and circle the one that costs less.

Note: Even if the custom boxes are cheaper, you may still use flat-rate boxes for backers that ordered more than one product from you or had a bunch of add-ons.

Here’s my chart so far:

DIY_shipping_estimate

Now for Amazon

First, I will go over how Amazon classifies your product. Each tier has a different fulfillment price.

To make things confusing, Amazon references many tiers in their documentation. They are various combinations of ‘small, standard, oversized, media, and non-media’. However, for multi-channel fulfillment, only these 3 price tiers are used:

  • Standard-Size Media
  • Standard-Size Non-Media
  • Oversized Media and Non-Media

My first question was “What counts as media?” I really had to know since the prices were so much better. Alas, card games were not included.

This counts as Media:

  • Books
  • Music
  • Video Games
  • DVDs
  • Software

Next: Sizing. Here’s a chart straight from Amazon that will let you know if your product is Standard-Size or Oversize:

Amazon_Sizing

Note: If your product is Oversized you will not be able to use Amazon Multi-Channel Fulfillment for international orders.

You should now know which of the three price tiers your product falls into. Choose the corresponding chart below to complete your per-unit calculation. If you have an Amazon Seller Account, you can view these charts here.

Standard-Size Media

amazon_media_fulfillment

Standard-Size Non-Media

amazon_standard_fulfillment

Oversize Media and Non-Media

amazon_oversize_fulfillment

As you can see, there is a basic handling, packing, and weight fee. The weight fee is per pound. Oh yea – unless your backers are really unhappy with how late your project is, you should only pay attention to Standard shipping prices.

Amazon International Fulfillment

International Multi-Channel Fulfillment is actually called FBA Export. And no matter how much it says in the documentation otherwise, you CANNOT use multi-channel fulfillment for your orders unless they are considered media.

I repeat: you cannot use Amazon Multi-Channel Fulfillment for non-media items. It’s a huge bummer. Also, your media item must be standard-size, but that shouldn’t be a problem.

If your product is considered Standard-Size Media (see the chart above), then you can skip ahead. I’m going to quickly cover two alternatives.

1) You can just ship the international items from your house. I sent all of my games to Amazon and then used the cheap ‘return-product’ option to send me all of the games that I needed to ship out of the country. To calculate this, add the .50 per unit fee to the international DIY rates you already calculated above.

2) Read Jamey Stegmaier’s blog on using Amazon to ship items all over the world. It’s great stuff. To summarize, you will ship a big stack of your games to Amazon warehouses on different continents, sign up for Amazon accounts in different countries (Amazon.de and Amazon.co.uk for example), and then pay “domestic” shipping prices for those countries.

It’s hard, but it could save you more money than shipping it from home, especially if you have a decent number of international backers.

So you have Standard-Size Media to ship internationally?

Here is the price table, which you can find here on Amazon.

amazon_intl_fulfillment

Alrighty. Calculate your FBA Export prices to various exotic locales and write them down.

You should now have a very good idea of how your DIY and Amazon costs compare. Here’s my final chart, highlighting which option is cheaper for me. Note that I added $.50 to each of my international DIY costs.

shipping_calculations_edit

This should actually give you a great idea of how much *more* to charge for international shipping. If I had done this ahead of time, I would have added $10 to shipping to Canada and ~$19 to the rest of the world. Instead, I charged a flat $9 international shipping rate. Don’t be like me.

Now for the payoff

Let’s do a quick calculation of what it would cost to ship 100, 500, or 1000 items to backers here in the US. As the numbers get bigger, the savings becomes more apparent.

cost_comparison_multiple

 Keep in mind the above price differences as you read through the next section.

Step 3: More costs, fees, pros, cons, and things to keep in mind

Amazon Fees

1) Monthly storage fee. If you plan to keep your items in an Amazon warehouse after delivering to backers (so that they can continue to fulfill your online orders) you will pay a monthly, per-cubic-foot fee. Amazon actually has a GREAT fee calculator for this. Here’s the screenshot in case you haven’t signed up for your sellers account yet:

monthly_fee

For example, my 4 x 4 x 9 game is 0.083 cubic feet or 4 cents a unit each month. All together, I pay roughly $40 a month in storage fees.

2) Long term storage fee. This took me a bit to understand, so I’ll break it down for you. You only pay the long term storage fee if your product is in an Amazon warehouse for a full year. The cost is 22.50 per cubic foot.

Sounds scary, right? My plan is to sell as much as I can in my year and then if I still have a lot of units unsold, I’ll use Amazon’s ultra-cheap 50-cents-per-unit to send them home. Or, I’ll suck it up and pay the roughly $1.80 per unit to keep it in storage.

3) The Amazon move-your-product-around fee. OK, this is a big deal and I feel bad that I haven’t brought this up yet. It’s tough because it might not even matter in the end, but you have to know about it.

Without getting into the details, I’ll say that when you ship your product to Amazon, they will want you to ship it to three separate warehouses. That’s ridiculous and expensive. You can decline this and ship it to just one warehouse, but there is a fee. However, you may never get charged this fee.

It works like this: If people start buying your product in a region that is pretty far away from where your product is stored, Amazon will ship a portion of your products to a warehouse closer to that region to save money on shipping them. If this happens, you will be charged a per-unit fee based on the chart below.

amazon_move_around_fee

I have not had the blessing of selling enough games for this fee to manifest itself. I’m just getting started though, so who knows?

In any case, this blog post is about Multi-Channel Fulfillment, not what comes afterwards. I fulfilled ~300 games with Amazon and there has been no moving my product around yet.

DIY costs

1) Time. It’s going to take you a while to organize, print, label, pack and ship your products to all of your backers. Do you love your family? No? Ignore this, then.

2) Packaging. You already calculated the per-cardboard-box cost for your product. Now add the cost of packing tape, labels, packing filler (I suggest paper, not peanuts), pens and/or printer ink, and gas money to drive back and forth to Office Depot and the Post Office.

3) Space. Some people don’t mind having 1500 items crowding their garage, guest room, attic, den, or kitchen. Just keep in mind that they might all end up fitting in the fireplace if the person you live with feels differently.

“Roaches love cardboard.” – my fiancee.

Final Calculations

I want to address a special case where you have chosen to use Amazon to fulfill your product, yet one or more of the items you have offered to backers cannot be fulfilled by Amazon. For example: an autographed copy of your item.

What do you do then? I think you should ship your items to Amazon first and then use Amazon’s cheap return-your-product option to send the items you need to your house. I promise it will be way less expensive than shipping from your place to Amazon.

Closing Notes

I have done my best to offer accurate advice and I hope that I have made things much easier for you by compiling my research into this guide. However, you should never trust people on the internet. Please double check my work in regards to your product.

Additionally, the Amazon fulfillment prices change every once and a while, so it may be different by the time you are reading this.

Let me know if I missed something or if you have any questions.

The next blog, Part 3, will explain how to setup your Amazon product online, how to get your product to an Amazon warehouse, and then how to make a fulfillment order.

– Chris

You can follow my gaming Twitter @whatohgame if you are so inclined.

Using Amazon Fulfillment to Ship your Kickstarter Product (Part 1)

I Kickstarted a card game and decided to use Amazon to handle my fulfillment. Why’d I do it? What problems did I run in to? Would it work for you?

Part 1: The Basics

This blog is for creators like myself that know jack about fulfillment. Hopefully I can butter you through the obvious-to-some, confusing-to-me lessons I learned during my pilgrimage to the fulfillment mecca: Amazon.

ful·fill·ment
fo͝olˈfilmənt
noun
  1. satisfaction or happiness as a result of fully developing one’s abilities or character.
  2. the performance of a task, duty, or role as required, pledged, or expected. (i.e. packing and mailing a ship-ton of  products to your backers)

Why Amazon?

Nay, why fulfillment? Because you don’t want to spend a week – or more – packing and shipping your product to backers. Well, you might want to. There are surely others like myself that like doing everything on our own, especially if it means saving money. Ah ha! Saving money. Interestingly and fortuitously, using a 3rd party to handle the fulfillment of your games may actually be cheaper that doing it yourself.

How Is That Possible. 

It’s actually simple. These companies ship so many items daily that they have special deals with the USPS. Deals that literally cut the cost of their shipping to 50% or below. That blew my mind.

To give you a concrete example, Amazon fulfilled my Kickstarted game at a rate of $5.75 each. To ship the game myself, it would have cost $6.50 per game or so for states near Georgia and around $11.00 per game to go cross-country to California.

That being said, there are other costs: shipping your product to the fulfillment center is the big one and there are a few more smaller, miscellaneous expenses. If your math works out, using 3rd party fulfillment will save you both time and money. (This math is talked about in detail in Part 2)

So, why Amazon? Three reasons.

After fulfillment was complete, I wanted to sell the leftover copies of my game through Amazon.

“I don’t want our condo filled with 1500 games of What?!? Oh… even if I do enjoy playing it. Also, I love you.” – My fiancée.

I only had one item to ship – the card game. Creators with extra items such as posters, post cards, post-it notes, pistols, pastas, or polaroids will want to look into a different fulfillment option.

Why else?

The golden marvel of Amazon is it’s insanely cheap rate for shipping you back your product. What’s the rate? Fifty cents per item. Need 50 games to shop around to local game stores? 25 bucks. Need 100 games to sell at GenCon? 50 bucks. It’s great.

However, please note that Amazon takes their time when shipping you back your product. Estimates are “one to two weeks for preparation and then another week for delivery”

So you’re saying I should use Fulfillment By Amazon?

Ah – the confusion begins. Fulfillment By Amazon (or FBA) is actually not what you want information on. FBA is the name of the service that specifically refers to when Amazon ships your product after a customer buys your item off of their online store.

You aren’t selling your product on Amazon (yet). You are wanting Amazon to package and ship out all of the games you already sold on Kickstarter. That’s called Amazon Multi-Channel Fulfillment. And that took me way too long to figure out.

The first steps

Go ahead and create your seller account and start looking around. It’s one of a few different accounts you can open with the same email under Amazon. Others include a normal Amazon account and also your Amazon Payments account that you will need to collect money from Kickstarter.

Edit 7-16-2014: Please note that their are two types of plans for you to choose from when signing up for your Amazon account: The Individual Plan (FREE) and the Professional Plan (39.99).

When I signed up, I was under the assumption that I couldn’t sell on Amazon unless I had the Professional Plan – maybe it was how it was worded?

So, there I was, paying 39.99 a month just because I had to set up my product on Amazon months before it would arrive in the states – otherwise I could not have coordinated the shipment from my manufacturer to the Amazon warehouse.

So, I contacted Amazon support who did two wonderful things: 1) They informed me I didn’t need the Professional Plan – I could use the Individual Plan for both Amazon Multi-Channel Fulfillment and for selling in the online store and 2) They refunded me all of the months I paid for the service and didn’t use it. AMAZING.

end edit

Start thinking about shipping.

The one large and possibly towering expense that comes with using 3rd party fulfillment is the cost of shipping your product to the fulfillment center. Usually right after the product was shipped to you. But you don’t have to double up your shipping costs.

So, yes, it’s obvious. Just ship the games directly to Amazon. Even if you don’t plan on selling your game on Amazon afterwards, you can use Amazon’s ultra-cheap ‘return product’ rate to get the rest of your products back home.

Working out the shipping details with your manufacturer can be tricky and I will write about my experience with it in Part 3.

The next article in this series will dive into the math behind choosing whether Amazon multi-channel fulfillment will work for you.

Hope this helps anyone who’s reading and please feel free to ask any questions. Also, let me know if this is helpful!

– Chris

You can follow my gaming twitter @WhatOhGame if you are so inclined.

Part 2: Accurately Estimating the Shipping and Fulfillment Costs of Your Kickstarter Project