Kickstarter – Shipping Challenges

We just completed the second of our Kickstarter fulfilment contracts from SchilMil Games for their game Manifest. I’m not going to comment on the game itself – readers can look it up; since what I wanted to discuss was the actual fulfilment aspect.

As many of you know, we do this as a sideline and help for Kickstarter publishers. It’s not as if we do a lot of them (this is number 2 in nearly a year of offering this service) and we don’t make a lot at all. The goal for us is to help publishers get their games to Canadian backers at a cheaper rate, not really make oodles of money. Since we already have the facility and experience shipping, it’s not really a big thing to add this on. On the other hand, as many publishers know; Amazon Fulfilment can be extremely cheap and is often the better option to go to.

Anyway, for Manifest, what we found is that we probably have to adjust our quoting method. See when we quote an estimated shipping cost we use both the game weight provided to us and an estimate of where games will ship to. This is based off our own shipping patterns in Canada, so a weighting towards BC / AB is added in. In this case, the estimated pricing we provided was $10.50.

What we found was the actual average was $13.25. This came from shipments mostly being sent to Eastern Canada (Ontario / Quebec) and only 1 to Alberta. That caused the weighting and cost to go up substantially. In addition, game weight was a factor. The game itself weighed in at 1.8kg but due to volumetric adjustments, it came to 2.56kg in what was charged.

Overall, we saw a minor loss in the shipping of this Kickstarter; mostly in the processing / salary cost. Overall, it’s a good learning experience as we continue to offer this service. It’s in particular worth noting that we are now able to help with US shipping of Kickstarter games too.

Shipping more, making less

One of the dangers of this business is doing more for less. Unfortunately, it’s an easy thing to do when you are working on thin margins and/or changing how your processes work. Unfortunately, in this case, we made a few mistakes and ended up doing the above – the worst case scenario possible for a business like ours. It’s why we moved Free Shipping to $175 from $150.

The Setting

In January we managed to request a lower rate on our Canada Post shipping.  This was predicated on a certain volume of items shipped, which we expected to hit with a minor increase in our shipments.  At the same time, we noticed a decrease in our shipments to the East Coast due to the increasing competition we saw.  So, to hit both the increased number of shipments we needed and to pass on the savings, we decided to lower our Free Shipping threshold to $150 from the original $175.

What Happened

Well, unfortunately we didn’t hit the shipment numbers that we required, which meant that our rates bumped back up to our old rates.  That meant that for each free shipping order that went out, we were losing more than we were previously.  Combine that with the fact that we did see an increase in free shipping orders, our total losses had increased.

Now, this would have been fine if we saw a significant bump in shipments (thus generating more total revenue even if we made less per order); however this wasn’t the case.  We saw more shipments certainly, but not enough to cover the increased cost of shipping all the free shipping orders.

If you are having trouble imagining it, look at it this way – if we free shipped 10 orders previously and it cost us $15, we lost $150 for the 10 shipments.  Now, if we free shipped 12 orders now at $15, our total loss is now $180.  However, our revenue numbers are $1,750 to $1,800 – a $50 revenue increase.  That’s a net loss in profit, not a net gain.

Thus – more work, less money.  It’s why we shifted back to the $175 free shipping level.  Will we ship less? Probably.  We might even lose a few customers because of this – but the gain in profitability should balance this out.


US Shipping – New, Lower Rates

We have worked out a way to ship items to US customers at a reduced rate which ranges from about CAD$9.50 to CAD$21. What we will be doing is exporting the products to the US and then putting the pre-packed orders into the US mail system (FedEx or USPS); which will reduce the overall cost. However, there’s a base cost to doing this (the export fee); so we are going to be limiting exporting to once a week (or more, if we get enough orders flowing in from the USA).

Due to the cost of the export fee; we will not be offering free shipping of any form. If this experiment actually works out well and we get a decent volume of orders, we might revisit our decision, though in the short-term we would prefer to increase our exporting from one to two – three times a week. That means customers get their orders faster and we aren’t sitting on packed boxes for long periods of time.

Ordering will be pretty simple – customers just need to input their address and zip code in the USA and the system will calculate the cheapest shipping option for them. A Canada Post shipping option will also show-up, so that customers who aren’t willing to wait can order direct.

We do reserve the right, if we do not hit the minimum volumes that we need to just change the shipping method to good old Canada Post (again, see minimum charge for exporting). Any questions, feel free to ask below

The Spiel Essen 2014 – Pre-orders

So, here is the deal. We (or technically, me – Tao) will be visiting the Spiel at Essen this year. It will be our first year there, but as we understand it; all games are generally purchased in cash and discounts (retailer level discounts) might not be available from all publishers. It really varies and of course, games are limited. On that note, we are not going to ask for funds from people beforehand but expressions of interest. Let us know if you are interested in any particular game releasing in theSpiel and if possible; at what price. If you haven’t seen the list of games releasing, there’s one on BGG.

Note that for all the major publishers like Fantasy Flight, Rio Grande, Z-Man, Asmodee, etc. we will likely not be picking it up in Essen as availability via ‘normal’ channels is within a few weeks. As such, it will be cheaper and better to purchase those games ‘normally’. What we will be looking to pick-up are small print run games and games not announced / not releasing in North America.

So, let us know below in comments what you would like. This post will be left open to let everyone comment until the day of the Spiel.

Little Losses – Fraud, Theft & Mistakes

One of the aspects of business that crops up that most people who don’t own / run a store and/or deal with the accounts of a business do not realise is the amount of ‘little’ losses a business experiences. These come from a variety of areas, and I”ll discuss the 3 major one’s we see.


I’ve written about online fraud before, the stolen credit cards that are used to ship products to others.  It can range from the simple stolen cards to the more elaborate fraud of having an order shipped and then declaring it not desired / charged-back to us.  The vast, vast majority of these orders are international and it’s why a lot of businesses don’t deal with non-domestic orders.  For us, it’s borderline about whether International orders are worthwhile and it’s only because we generate a small amount of additional ‘international’ business from our videos.

Overall, on a yearly basis we probably lose about $500 on average to these cases.  Let’s just say that we get hit by a significantly higher number of fraud attempts than this.


When we were a pure online store without events / open houses; theft was only something we ever had to worry in 2 instances – Conventions and Employee Theft.  In both cases, those numbers were significantly lower than a normal retail store.  Probably about $100 in total a year.

Now that we have Open Houses, we’ve had to significantly increase internal security (including the security cameras in the warehouse) to deal with potential (and real!) theft during these periods.  We’re still waiting to see what the numbers are like, but we’re likely to hit a few hundred at least we would think.

Mistakes & Errors

Mistakes and errors are the last major area for losses and sadly the most common.  There are 2 major areas – internal & external mistakes.  Most internal mistakes can be attributed to shipping errors (orders sent to the wrong address or the wrong product (or insufficient product) sent), etc.  Many of these can be (and have been) reduced by both technology and processes, but we still make a couple of mistakes a month.  It’s the nature of the beast, though we are always working to get it lower.  Generally, the cost per month is maybe a $100 (shipping cost back and forth, etc).

External errors are errors that we end up eating the cost of through no fault of ours.  These can range from board games that are replaced by us at cost and publishers never replacing the defective parts with us (rare, but it happens), damaged games in-transit due to shippers and distributor errors that cost us money.  These could range from bad shipping errors to math errors in the invoices (it happens) that we don’t catch. Again, these are rare so maybe a few hundred a year.


Not much really, but for us; all these losses add up to about a $1000 dollars at most, maybe a little more or less each year.  On the other hand, a $1000 is a lot of work – that’s $3000 at least in product sales, probably a good 60 orders more that we have to get a year just to break-even.