Crowdfunding is an online money-raising process that encourages users to donate small amounts toward a bigger goal. Once you reach your goal and receive enough donors, you have the cash you need to start your business, manufacture your products, and get going. As an ecommerce professional, crowdfunding is a good option for getting the startup money you need to acquire products or manufacture your custom product. According to Entreprenuer.com there are over 600 crowdfunding platforms out there today — making it easier than ever to get the funds you need. However, before you create a campaign, it’s important to know how the process works and what you need to do to ensure you actually get donations.
Getting Started with a Platform
There are a few crowdfunding platforms out there to choose from. You will want to pick just one for your crowdfunding campaign. While you can setup a campaign on multiple sites, you only receive the funds from a campaign if you reach your stated goal on that particular platform. Therefore, it’s best to pool your donations in a single spot.
Pick a platform with a good search engine rank and one that most users are familiar with. Unknown or no-name platforms don’t generate much organic traffic and users won’t be inclined to donate on a site they don’t trust. Some common platforms used for crowdfunding according to Forbes include Kickstarter, IndieGogo, Crowdfunder and RocketHub.
Setting Up Your Campaign
When you set up your campaign, you will have a few decisions to make. First, you need to set a goal amount — this is the amount of funds you need to pull off your project. Be realistic and do some real research. Don’t just pull any number out of thin air, because when you write your campaign, you have to justify to the readers why you’re asking for that amount and how you plan on spending it. Once you’ve started your campaign, you cannot change the amount either, so make sure you get that amount accurate.
Some platforms let you decide how to raise those funds. You can choose funding that lets you keep anything you raise or a fixed funding amount, which means you only get to keep the funds if your campaign reaches a certain amount.
Offering Perks to Donors
Perks are incentives to donors for giving your project funding. It’s important to offer contributors a perk or non-monetary incentive so that they’re inclined to fund your project. Some perks can include a free product once it’s manufactured, their name on your website, etc. It is entirely up to you the perks you want to offer. You should offer different perks based on the donation amount — with the higher amounts receiving better perks.
Writing Up Your Campaign
Your crowdfunding campaign is all about telling people why you deserve to receive their donation and what makes your project special. Tell a story and be real in that story. Tell contributors why you’re passionate about starting your ecommerce business, what makes your products unique, and how you will use their money to bring your project to life. Be concise in your pitch and be genuine. Don’t make promises you cannot keep. Tell the readers a little about yourself and your background — emphasizing how your background will make your project successful.
If you can, include videos or photographs of your project. If you’re selling a custom product, for example, have a photo of a prototype or sketch so people can see what they’re funding. Tell them about your products and your brand as much as you can. The more information you give, the more likely a person is to contribute to your cause.
