How to Plan Reward Tiers on Kickstarter

📦  Choosing a Sales Price

Calculating Prices and Discounts

To help calculate your Cost-Of-Goods-Sold (COGS), the Wholesale Pricing, Keystone Pricing, and Kickstarter Discount for your product, use the COGS calculator, here.

Wholesale Pricing

The wholesale price is the price at which you sell per unit in bulk to distributors and retailers.

Be sure to give yourself a healthy profit margin when selling wholesale. A good rule of thumb for a wholesale price is 2x the Cost Per Unit.

EXAMPLE:  if it costs $30 to manufacture a unit, and $10 to warehouse, pack, and ship it – then a good wholesale price would be $80 per unit.

Keystone Pricing

Keystone pricing is a rule of thumb used by retailers whenever they purchase stock from you. Essentially, they will double the wholesale price to give themselves a health profit margin when reselling directly to consumers.

In essence, to set a fair and good MSRP (Manufacturer Suggested Retail Price), make it equivalent to the Keystone Price.

Kickstarter Discount Pricing

The best performing discount % for VIPs and Early Birds is 35% to 55% off the MSRP or Keystone Price.

For the remainder of the campaign, I recommend giving backers a discount of 15% to 28% off the MSRP or Keystone Price.

When selling a multi-pack for regular consumers, consider matching the original discount % provided by the Early Bird tier – this way, even if the Early Bird is no longer available, consumers can still get that same level of deal if they buy multiple units.

The best discount should always be available by purchasing the largest bundle of units, i.e. a wholesale pack at a wholesale price (55% off).

Best Prices for Kickstarter

According to Jellop, the largest crowdfunding agency, the best core-package prices that produce the highest campaign raises on Kickstarter are:

Of course, not all types of products can start their product offering at such a high price. Video games, for instance, usually begin at $20 on Kickstarter (and cheaper for the early bird tier). 

The above list of prices are just statistically what produces the highest total campaign raises on Kickstarter – if your product can meet them, it is a good signal and it is not recommended to try making your starting price cheaper.

Shipping Costs

If you are only selling within the USA, you do not need to place shipping costs anywhere. Instead, bake the shipping cost into the product price.

If you are shipping to multiple countries, design a chart near the bottom of your Campaign Page which lists estimated shipping costs per country.

You can use EasyShip’s Shipping Cost calculator to estimate shipping costs.

Reward Tier Planner

Use the Reward Tier Planner to help plan your reward tier offerings, prices, and their net income.

📦  The Price Ramp

Just like the campaign page itself, the potential backer has a journey through the reward tiers as they scroll down through them.

Ideally, the backer’s journey down the pricing ramp is smooth and effortless. This allows their eyes to glide down the ramp, easily digesting the prices.

With a smooth ride, the potential backer will generally stop at the first tier beyond the limit of which they are willing to afford. After reading the benefits, they return back up a tier and begin the purchase process.

See an example below of a super-backer, with their journey illustrated using a red line and arrow:

Changes in Digits

When the prices are simple, particular changes in the digits and number of digits are what register in the reader’s mind while digesting the prices.

For instance, alternating 0’s and 5’s at the end of prices help signify differences and make tiers stand out.

Similarly, when an additional digit is added, they know the price has increased substantially and that it is a different level of tier.

Take the following ramp of numbers, for example:

$16 → early bird

$20 → digital core package

$30 → early access + recognition

$45 → digital collector (KS exclusive DLC)

$60 → digital collector + physical core package

$85 → physical collector

$125 → all collector items

$300 → collaborate or retailer wholesale

$1000 → collaborate more

Price Fixing

Another strategy that may be used is called “Price Fixing”, where there is a core-package reward tier that is never technically the lowest price available – it is always beaten by an indefinitely available early bird tier which comes with the same items. This produces an urgent sense of “getting a deal”.

Consider the following example ramp, with the “Indiegogo Special” tier:

VIP SPECIAL (24 hours)

$45 USD ($89 USD, 45% off)

SUPER EARLY BIRD (Day 2 to Day 10)

$50 USD ($89 USD, 40% off)

EARLY BIRD (Indefinitely available)

$59 USD ($89 USD, 30% off)

INDIEGOGO SPECIAL (always beaten by the Early Bird price tier)

$75 USD ($89 USD, 15% off)

2 PACK (never feel like it's an unfair deal, attractive if past day 10)

$100 USD ($179 USD, 45% off)

8 PACK (this is a real deal to a serious buyer or reseller)

$300 USD ($699 USD, 55% off)

BEGINNER HOBBYIST KIT

$475 USD

📦  Reward Tiers & Add-ons

Kickstarter reported that the best-performing campaigns have a total of only 6 available reward tiers. Do not have more than 10 available at a time.

Format the reward tier graphic with the price clearly visible in the top corner, so users immediately know that it they are seeing the reward tiers:

Early Bird Tiers

For this tier, apply a discount between 35% to 55% off from the MSRP price.

Consider adding an exclusive gift that is only available to Early Bird backers, such as a miniature, dice, custom digital content, signed merchandise, etc.

Early Bird tiers are time-limited to the first 48 hours of a campaign. To reduce clutter, only create a total of 1 to 3 early bird tiers.

Late Bloomer Tiers

The Late Bloomer tier is the opposite of the Early Bird tier. 

The Late Bloomer tier exists as a time-limited reward only available during the final 72 hours of the campaign.

Do not make the late bloomer tier’s discount cheaper than any pre-existing early bird tier from the beginning of the campaign. Consider $5 off.

How Many Tiers?

For physical products, while the estimated delivery date may not be entirely in your control due to third-party manufacturers and suppliers, it is known that delivery dates greater than 6 to 12 months can substantially impact conversion rates into sales / backers.

For video games, consumers expect development to continue for an extended period of time, and therefore a delivery date of 1 to 2 years in the future is expected and accepted.

Estimated Delivery Date

Both Kickstarter and Indiegogo report that the best-performing campaigns have a total of 6 available reward tiers.

It is not recommended to have more than 10 reward tiers in total.

⭐ Tips & Tricks

Kickstarter Exclusive Item

Consider giving all backers an exclusive item, such as exclusive digital content, collectible cards, etc. This helps drive incentive to become a backer.

Early Bird Exclusive Item

For additional urgency and incentive, consider including a special exclusive item with early bird orders, such as a figurine, exclusive digital content, etc.

New Tier Requests

Sometimes, you may get requests for a new type of reward tier. In this scenario, you can create a new reward tier during the live campaign with a limited quantity. Make a campaign update about it. If it sells out quickly, consider making it a permanent tier without a quantity cap.

Reward & Add-on Ideas

Here is a list of ideas to help brainstorm reward items and add-ons:

• Badge
• A shoutout to their social profile(s) of choice (for high-price / collaborative reward tiers)
• Premium Discord Channel / Badges / Name in Credits / Memorial Room
• Your Message In-Game
• Name plate customization or your name engraved on the physical product
  
  
• Bundles
• Bundles of core items to share with their friends 
• Expansion pack
• Extra battery pack
• All style upgrades
• Wholesale multipack
  
  
• Digital Content
• Exclusive DLC / Skin / Character / Equipment / Pet / Item
• Desktop Wallpapers
• Soundtrack / Artbook
• Lifetime Service Access
  
  
• Collectible
• Physical Box Copy
• Miniatures / Figurines / Papercrafts
• Manual Handbook / Rulebook / Game Strategy Guide / Compendium 
• Upgrade books from softcover to hardcover
• Additional Book / Comic cover options
• Foil Stamping on book cover
• Book Edging / Edge Printing
• Developer-Signed Merchandise
• Character Trading Cards
• Tarot Cards
• Plushie
  
  
• Game Statements
• Game-Branded Dice
• Playing Cards
• Play-Mat
• Tokens
• Card Sleeves
• Mousepad
• Coffee Mug
• Drink Coaster
• Magnets (fridge)
• Postcards
• Bookmarks
• Journal 
• Tote Bag
• Stamps Washi Tape

• Art
• Cloth Map
• Concept Art Posters
• Concept Art Book
• 300 Piece Jigsaw Puzzle of Cover Art
  
  
• Audio
• Physical Soundtrack OST CD
• Physical Soundtrack OST Vinyl
• Piano Book
• Audiobook of exclusive content (such as using murf.ai)
  
  
• Accessories
• Pins / Sticker / Embroidery & PVC Patch
• Keychains / Keyring / Acrylic Charms
• Wallet
  
  
• Jewelry
• Pendant
• Ring
• Earring
  
  
• Clothing
• Shirts
• Hats
• Scarf