Do you have a fantastic idea to turn into a lucrative eCommerce business, but you lack resources? Crowdfunding can be the answer. This financing method allows you to pitch your business idea to an online community that might be interested in investing.
Crowdfunding has proved to be a valuable financing method for startups to raise capital beyond banks, angels investors, and venture capitalists. The unlimited access and low-cost entry to crowdfunding platforms have made it easy for entrepreneurs to turn their ideas into reality. Wondering where to start? Check our simple guide on utilizing crowdfunding to launch your eCommerce store.
Choose a Star Product
Backers tend to support tangible items as opposed to broad ideas. Hence, you’ll need a unique, one-of-a-kind product idea that is either first to market or better than your competitors.
Find a specific product or category, such as beauty products, and seek backing. Then, once your initial idea has taken off, you can build your eCommerce store.
Conduct a Product Survey
Before starting a crowdfunding campaign, you need to conduct market research to understand your product demand and audience expectations. It’s crucial to get as much feedback as possible so that you can plan your crowdfunding campaign well and work on potential loopholes.
You can conduct product surveys via newsletters, forums, or social media. Remember, a well-researched survey will increase the chances of delivering a product that matters.
Pick a Crowdfunding Platform
There’s a growing number of crowdfunding platforms on the market, and deciding which one will best support your business idea will largely depend on your unique crowdfunding goals. Additionally, the media differentiate depending on their structure. As a result, you’ll have to decide whether you want the equity, donation, or rewards model.
Finally, consider the platforms’ fees and missed targets, available payment methods, support options, and restrictions before making your choice.
Make Your Campaign Visual
Your pitch needs to convince potential backers that your products can effectively solve a specific problem and help people. Highlight what makes it unique and demonstrate this by using convincing designs, photographs, or videos where your product shines. Having a solid business plan covering everything from product development to budget spending plans would also be beneficial.
Tell a Story
Delve into storytelling to get them to know you, where the idea came from, why you are passionate about it, and where you’re planning to take it. Give as much information as possible to improve validity, boost your credibility, and connect with potential sponsors’ emotions. That being said, try to be specific and memorable.
Promote Your Crowdfunding Campaign
Most potential backers don’t browse crowdfunding campaigns daily; you have to go out to find them. Often, this starts with your network. Then, you should put time and effort into creating a digital marketing campaign to create a buzz about your product and raise awareness of your crowdfunding campaign. Besides social media, you should leverage email marketing, influencer marketing, and paid ads.
Incentivize Your Backers
Incentivizing backers is a smart way to attract them to invest in your idea and to get them to invest more. Consider offering product discounts, branded marketing materials, free products, pre-orders, public acknowledgments, and even creative collaborations. That being said, keep in mind that the incentives will cost you money, so price them sustainably. Make sure you understand the total cost of delivering the reward beforehand.
Keep Your Backers Updated
People investing in your campaign have taken a chance with your idea, so you should ensure to update them about the progress. Send regular updates and be upfront about the good and bad parts of the product development. Additionally, think of backers as your existing fan base, and by nurturing the relationship with them, you’ll make sure they stay loyal.
So, continue reaching out to your donors with updates and newsletters even after the campaign is over. Also, let them know when their incentive is ready to be claimed.
Set Production Timeline
Before launching the campaign, you should have an informed estimate about your production. For example, consider the number of products you plan to make, how long production would take on your ideal order size, how long it will take to get your products from the manufacturer, and how long it will take to fulfill your campaign rewards. Such an estimate will give backers an idea of what to expect. If there are production delays, make sure to inform them and give them an updated estimate.
These tips on utilizing crowdfunding to launch your eCommerce store are just the beginning. A successful crowdfunding project can help you secure the needed capital to produce a product, but you shouldn’t take your eyes off the long-term goal of building a successful business.