Apr 24, 2012

Sweet Swag vs. Crap: Addendum

Reading over my post from last night, I realize it sounds like I’m advocating you DIY everything.  What I didn’t mention is that in this project, my handmade items come in elaborate storytelling packages, and those packages have mass produced parts.

I’ve found the best way to get optimal value out of a plan is to focus on doing work that only you can do.

Once you’ve put together a spreadsheet or just run the numbers yourself, you can see that not everything is efficient to do by hand.  Printing projects, for example, are much cheaper to farm out to a custom printing place than to do at FedEx Office.

Another factor to consider is whether you plan to use the leftovers. If they’re exclusive to the Kickstarter, making them yourself may make more sense.  In my case, most of the mass produced parts will be used to maintain my stock of product, so it’s reasonable to use the Kickstarter campaign to pay for the first run of them. Run your numbers, and make the call.

Crowdfunding: Sweet Swag vs Crap

So, I’m working on a “little” tangible narrative project to fund on Kickstarter – little in that, it’s half couture accesssory line launch, half collection of short stories. A lot of thought has gone into planning the rewards for it, so I thought I’d share some of those thoughts, and walk you through some of my logic.

My campaign is a mixed bag of mass produced stuff, handmade stuff, and services. In my spreadsheet, each reward has an efficiency score.

Unit Price x (1 – (Sales Tax % + Kickstarter % + Amazon %)) – (Material Cost + Shipping Cost)

Unit Price

Efficiency =

This is basically like a profit margin that leaves out certain costs. The score shows how much of the revenue actually goes toward paying the project’s fixed costs, and (maybe! even!) making a profit.

Mass-Produced Stuff

(Average Efficiency: 61%)

This includes t-shirts, posters, hats, stickers, magnets, copies of a book – basically anything you take out of a box from a supplier and put into a box going to your backer. The upside to these is that they’re easy; but they also come with their own pitfalls.

There’s nothing wrong with mass-produced stuff, but it’s worth it to think through how that stuff is going to relate to the project as a whole. Copies of your book are highly relevant; t-shirts featuring the logotype for your horror movie aren’t, even if it’s a very pretty logo. Which I’m sure it is.

In my experience, things with logos printed on them are for giving away at events, not for making money. I’ve taken breaks from planning my rewards several times; when I come back to them, anything that doesn’t “fit” with the project jumps out at me right away and I can nix it.

Batch size is also a critical consideration, and you should budget things differently depending on how many of them you need to buy. It’s not wise to count the cost of anything you’ll be buying in the hundreds or thousands as costing you “$1 per unit” if it costs $100 whether you sell one or 100. The best way to stay safe on your budget is to pick a likely number of orders and roll the cost of covering them into your fixed costs.

Finally, anything mass produced has a market value. No matter how awesome it is, a t-shirt is basically worth somewhere between $10 and $30 to a consumer, which means that charging $100 or $1,000 for it won’t seem fair. In the end, that means you are only creating a small amount of the value on that item, which means you’ll only get a small amount of the money.

Handmade Stuff

(Average Efficiency: 73%)

This is the central model of my project; people pay me money to buy supplies, turn those supplies into finished goods, and mail those to them. Handmade items require a lot of your time, but they also net you more money because you’re creating the bulk of their value.

I highly recommend counting time as part of your unit cost when you go to determine your reward prices. Put a reasonable dollar amount on your time, and estimate how much of it you’re using to make your rewards.

This is important to do because all the time you spend on reward fulfillment is time you could be spending on larger project goals. It’s easy to discount the time commitment when you think about making one or two reward items, only to find yourself overwhelmed when you have to make hundreds.

I keep my labor and materials costs separate, and assume that all or most of the labor costs until I fund are going into paying off the project’s fixed costs. The other advantage to assigning a budget for time spent, is that if your project overfunds, you have the budget to hire skilled collaborators. For money. That’s very helpful if your kickstarter ends up being a runaway success, as it should be.

Remember, signing posters and writing thank you cards takes time, too.

I find it’s easier to keep handmade things relevant because of the time commitment; I want my time spent to overlap with the main goal of the project as much as possible.

Also, unless you plan to close up shop and never offer these products again after the Kickstarter, you should also plan to stock yourself for retail or online out of your Kickstarter funds. Raise the money to make more product than you’ll sell in the campaign.

Services

(Average Efficiency: 74%)

These are the things that usually live below the fold on any Kickstarter page; they’re usually reserved for backers who pledge a lot of cash. In fact, I could overfund my campaign just by selling one of each of my services! Wait, is that right? *Doublechecks the spreadsheet.* Wowza!

I may differ from others on my philosophy for high end rewards; I’m looking to sell high end work, rather than get a large grant from a generous donor. I want my high end offerings to sell, and sell well. Someone out there would actually be giving my the listed amount, so I want to offer something that’s worth that much to them.

Determining their value is kind of a fuzzy proposition, but generally the following things increase the value of a service: luxury, personal attention, exclusivity, collaboration, credit, and relevance to the project.

The classic example of a good upper level reward is inserting your backer as a character in your book/movie/game/comic. That’s exclusive, requires personal attention, gives credit in a spectacular fashion, and is deeply relevant.

You may notice that their efficiency is only marginally higher than handmade items. I tweaked my services a lot to keep them close to the median efficiency, even though that has meant offering more stuff. If the efficiency is much higher, it means I’m offering too little and won’t likely attract a buyer; and if it’s much lower, it means I’m spending too much time or cutting too deeply into my funds.

Of course, this doesn’t just apply to services on the high end of the reward spectrum.  Make sure all of your services have concrete limits and deliverables. The more specific the service is, the better you can set a price for it.

Crunching Some Numbers

So, to figure out all of this, I built a set of spreadsheets. I won’t go into ALL of the details, because it’s pretty detailed. Here are the sheets I built:

Costs – The costs of all common materials, including labor, printing, time on CNC machines, paper, boxes, bubble mailers, etc. It calculates the total for each. This sheet takes also tallies the fixed costs for the project.

Each item in the sheet has a package price, and units per package. The average number of backers for a project of my size is about 250, so for anything that comes in boxes of more than 250, the costs sheet calculates the unit cost as the package price divided by 250, to keep costs from getting “hidden” in large package sizes.

Services – On this sheet, I enter the time it takes to perform each service offered, and it calculates the total cost.

Parts – I enter the materials used and labor time needed to make each part, and it calculates the material and labor costs for each.

Packaging – Each type of packaging has fields for the cost of its base unit (such as a box), parts that need to be printed and cut, shipping, and assembly time. It calculates the materials and labor total for each. This includes both retail packaging and shipping methods.

Kit Builder – In this sheet, I mark off which parts, services and packaging I need for each reward, and assign it a price. It calculates a whole host of different things about each reward, including profit margins, net pay, and how many I’d need to sell to fund the project with just that reward.

This sheet also averages the calculations for all of the “active” rewards, so I can see the average profit margin and average amount needed to pay for the fixed costs.

Campaign Modeler – This works much like the Kit Builder; you can set numbers of sales for each reward and see how you’d do in different scenarios. For each scenario, it tells whether I’ve funded, and whether I’ve met my net goal and overfunding goals.

This may be more complicated than you want to get into, but I’ve found it extremely helpful in eliminating areas of doubt in my funding plan.

So, that’s essentially how I’ve gone about developing this.  Of course, everyone’s projects are going to reflect their needs, strategy and philosophy.  And after all, I’m describing a project that hasn’t even launched yet.  I’d love to hear your advice for me, too!

UPDATE: I felt this needed an addendum, so I wrote one.

Apr 9, 2012

Vintage Swag: The Rubaiyat of Omar Cigarettes

I have a thing for old books, a thing for vintage marketing stuff, and a thing for turn of the century pop culture, so I was very pleased to pick up this little book at a used bookstore in Austin.


It’s a small hardbound letterpress book promoting Omar Turkish Blend Cigarettes. I’m guessing it came in a promotional tin, or as a giveaway in newspaper promotions or at tobacco shops. Google Books tells me it was published in 1912, but other sources say 1914. This one was covered and kept in someone’s private collection, and the front of the cover paper later removed to show the front. A few pages have also been defaced, and it once contained a color plate in the front, which has sadly been torn out.


So, a quick history of Omar Cigarettes. They were sold from 1902 to the 1960’s and were named after the Persian (not Turkish) mathematician, philosopher and poet Omar Khayyam. Khayyam lived around the turn of the 11th century, and to the west he was largely known for his work in mathematics until 19th century poet Edward FitzGerald translated a selection of his quatrains (rubaiyat) into English under the title, “The Rubaiyat of Omar Khayyam.”

Khayyam became famous in the West because of this translation, which includes the famous line “A Jug of Wine, a Loaf of Bread – and Thou.”  This little book is a parody of the original Rubaiyat in comic book form – each pair of pages contains an illustration and eight lines of verse in which Omar tours modern day New York City, promoting his cigarettes as an earthly indulgence.


You can imagine that by the time Khayyam had filtered through Victorian popular culture enough to become a cigarette brand, all the nuance had been swept away.  For example, here’s the art that was used to portray Khayyam in FitzGerald’s translation.

Source: Wikimedia Commons

And here’s how Omar appears in The Rubaiyat of Omar Cigarettes.


The Omar of these comics is, put bluntly, a racist caricature of middle eastern peoples. The book also includes a fair number of slurs against Turkish people, as well as some invented slurs for comic characters living in the real world. And some really bad portrayals of Italian Americans.

This book shows so many differences between American culture in the 1910’s and today. Some of them are references to fashion and technology, and others are social…for example, Omar’s adventures in voting rights.

This book is also interesting because, to me, each of its comics – with a beautifully-rendered illustration on the left and a short poem on the right – is a paper equivalent of a modern TV commercial. Each is a short scene involving some comedic characters interacting with the product.  They’re short enough to absorb in 30 seconds, yet each tells a story.  The narratives are simple and similar to those in modern commercials for beer and snack foods.

The book contains Omar’s “adventures” at all kinds of activities – baseball and football, opera, burlesque, vaudeville, bargain basement sales, horse shows, tea parlors, and even an astrologer or “Star-Gazer”.

The Star-Gazer’s shop illustration has to be one of my favorite things.  There are also seasonal “spots” for Thanksgiving, Christmas, and New Year’s.

All in all, between the art and the poems, the book gives a great snapshot of New York City life in the 1910s, as drawn by tobacco advertisers.
As I mentioned, this particular copy carries a second story with it, as it was defaced sometime much later; they changed “Omars” to “pot” on the Election Day comic above. They even went back and “revised” an entire poem to turn Omar’s adventure in the world of baseball into a poem about…something else.

Judging from the language, I’m guessing it was defaced during the 1960s.

 

Some more interesting things about the object itself: I’m not sure whether the pages were originally trimmed or not – they seem to have been trimmed roughly with a letter opener and possibly a pair of scissors. One pair of pages is ripped, with a tab on one side and a corresponding gouge in the other.

It is printed on heavy, textured paper that has roller marks throughout.
You can see the letterpress impressions on the reverse of each page, too.  Here’s the reverse of the Star-Gazer illustration.  You can see the squares on Omar’s pants and the rippled edge of the astrologer’s robes very clearly.

There are more things I’d love to know about this title – like who the author and illustrator were.  Because it was a promotion, that information has proven hard to find.  I’d also like to know how it was originally distributed and whether the comics were meant for New York City natives or others.