a few questions regarding crowdfunding......

by AN DY
1 replies
Hello everyone! I just started planning my projects a few weeks ago and I am still researching. I have a few questions and it'd be great if anyone knows anything and could clear it up for me!
1. Do I have to consider tax?
2. is it necessary to get my idea patented?
3. what kind of shipping services should I look for?
4. Is marketing still crucial if I'm just planning a small project?
5. Are crowdfunding consultants worth it?

THANKS!!!!!
#crowdfunding #questions
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  • Profile picture of the author backertools
    Doing my best to answer these...

    1. I am not a tax advisor so this is not professional advice. Yes, expect to be taxed on income earned on Kickstarter. KS gives an explainer on taxes here. If you're selling something physical, you may also want to consider sales tax--assuming you're in the US, it should only apply where your business has a physical presence (so if you are based in CA, you should be collecting sales tax from customers in CA and then passing that on to the state, but you wouldn't have to collect from customers outside of CS). TaxJar has resources that can help you learn about sales tax.

    2. It's not necessary, but it may be desirable. I would ask a lawyer about your specific situation.

    3. I wrote a bit about shipping in this post on How to Set Your Crowdfunding Campaign Goal. If you're planning to ship over 100 items, you should talk to a fulfillment facility. Kickstarter has a list of fulfillment resources they recommend. You can also just google fulfillment facilities near you and give them a call.

    4. Yes!! Marketing is crucial. Even activating your personal social network will take some effort (this video has tips on that). Beyond your own network, you can work on building an email list (by putting up a landing page and running targeted FB ads to get people to the page), posting in relevant forums, and finding relevant influencers (here's a useful hack for finding them in your niche on Instagram). You can also pitch your campaign to press--here is the post I wrote about best practices for getting press.

    5. It depends. Not everyone has the ability to deliver, but experienced people can be helpful. I err on the side of recommending people put in the hours to learn how to market their campaigns rather than just trying to buy their way out of the problem. There's no magic--it's just a matter of doing the work. That said, if you find yourself hitting a wall, help from people with experience can make a difference.
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