How much will Kickstarter and Indiegogo charge you? Fees and prices to be aware of.

When planning to launch your first crowdfunding campaign on Kickstarter and Indiegogo there are so many things to keep an eye on, you should really balance between all of your competencies. Creative ones, financial ones, and business ones, it's like a one-man show!

Sometimes most people tend to think that creating a crowdfunding campaign and funding the goal is nothing more than getting only profit and success, but really there are a lot of fees and costs to cover.

So, how much does Kickstarter and Indiegogo charge you? What are all the platform costs to be aware of?

Keep reading to know more!

1. WHAT TO KNOW ABOUT CROWDFUNDING?

I'm sure you're all familiar with the crowdfunding business model, in the case of Kickstarter and Indiegogo platforms we are talking about a reward-based crowdfunding, which is the most known form of crowdfunding and probably the most profitable.

The business model of a crowdfunding platform is based on the fees applied to the campaigns created so that no backer will be charged with extra costs, so the way of earning of the crowdfunding platforms only depends on the fees applied on the funds raised. We will talk about that in a bit.

2. KICKSTARTER FEES

Kickstarter is one of the most known crowdfunding platform, helping creators getting their project funded, hosting over $1 billion in crowdfunding pledges!

Before talking about the fees you should know that Kickstarter works with the ''All Or Nothing'' model, basically, if you manage to fund all your goal you'll get all the money, but if the goal is not met, even for $10 to the final goal, you get nothing. All your backers get their money back, but the project is canceled.

What are Kickstarter's fees?
Kickstarter takes 5% of all funds raised for your project, which you’re required to pay when getting the funds. Also, Kickstarter payment processor will apply an a 3-5% payment-processing fee with $0.20 per pledge (pledges under $10 have also a micro pledge fee of $0,5). So for what concerns this particular crowdfunding platform, you will end up spending at least 8% for platform + payment fees. This 8% will be taken from the total funding amount received. 

Let's do a quick example now:
If you manage to raise $100,000 with your crowdfunding campaign on Kickstarter you will have to apply a 5% fee on your funds and a 3% of credit card processing fees, so the total fees will be $8,000, plus the extra fee of $0,20 per pledge. After all the math you will end up with less than $92,000 on a campaign that reaised $100,000!

Learn more on Kickstarter

3. INDIEGOGO FEES

Indiegogo is a real pioneer in reward-based crowdfunding platforms, raising millions of dollars with crowdfunding campaigns all over the world.

Indiegogo offers two types of crowdfunding: Flexible and Fixed. Just like Kickstarter, fixed crowdfunding means that a campaign has to totally reach its funding goal. If it doesn't, the campaign gets canceled. While flexible crowdfunding, which is something that Kickstarter doesn't have, means that regardless of whether the funding goal is reached, the person running the crowdfunding campaign gets to keep the money raised, BUT that comes with higher fees.

What are Indiegogo Fees?
If the funding goal is reached with the fixed crowdfunding option the fees are 5%, but of course, if the goal is not reached there will not be any fees, and backers are not charged. With the flexible crowdfunding option, the fee is still 5% if the goal is reached, while it's 9% if the funding goal is not reached and you keep the money raised. Other than that there are still credit card processing fees that are around 3%-5% with a $0.30 per transaction payment-processing fee.

Indiegogo will also charge you another $25 if you raise funds in USD without a US Bank Account.

Learn more on Indiegogo

WRAPPING IT UP

As we've seen there are a lot of extra costs to consider while planning a crowdfunding campaign, so my advice is to set a higher goal, allowing you to get more profits and cover all the expenses!

In order to do that and be sure to get funded you will need to build and apply the right pre-launch phase, that will consent you to break into the crowdfunding world already prepared with a community interested in your product, ready to back you! My job here is to make sure that you creators get on the right path, starting to build an effective and successful crowdfunding campaign!

Don't forget to stay updated for the next articles I'm going to drop and download the free e-Book now ''3 steps to success on Kickstarter and Indiegogo'' where I will lead you to the beginning of a great pre-launch phase, fundamental to start building an effective and performing crowdfunding campaign!

Ciao ciao

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