I get asked a lot about crowdfunding campaigns, especially for writers, so I thought I would do a complete breakdown of exactly where all the money came from and went to in my last campaign, which raised 12,093 euros in 30 days. Be warned, this post will make the accountants among you happy, but has nothing whatever to do with actual swords, writing, or anything other than the business side of running a crowdfunding campaign. For more general advice on crowdfunding, go here.
First, some background:
I wasn’t sure whether I should even do a campaign for this book. I had sufficient funds to pay for layout and editing without it, and as a non-fiction sequel, the already tight niche is even smaller. I asked my wife, and she said to do it so I did.* Four hours later I had shot and cut the video (with a very sore throat, hence the growl), worked out the goal and perks, and written the story text. I sent a link to the draft of the campaign to my mailing list, and was rewarded by some very useful feedback over the next few days. Another hour of work, and all the corrections that I could make in a reasonable time were done. Several folk suggested re-shooting the video, but I was too sick and it would have taken too long; because I hadn’t really planned this, we were only about 30 days out from Christmas.
I launched the campaign on November 23rd, and it hit its realistic target of 2,500e in about 9 hours. Realistic in that it would be enough money to pay my freelancers, and realistic in that I could reasonably expect my current readership to buy enough copies of the new book to meet that target. This was largely due to my mailing list; the people on it do tend to want to read my books and generally support my work. Keeping them informed, and perhaps more importantly asking them to get involved, really helped.
When working out your goals and perks, it is very important to bear in mind the difference between fixed and variable costs. In brief, the fixed costs are what it takes to produce the first copy: paying the freelancers, uploading the book to the printers, my time to get it to that point. The variable costs are what it costs to produce each copy after that: in this case printing and shipping, indiegogo and paypal fees, sales tax, and so on. A common pitfall of crowdfunding campaigns is to underestimate, or simply forget, the variable costs. You might raise all your fixed costs and still end up losing money to actually fulfil your orders if you're not careful.
The campaign then followed the typical pattern; a slump in the middle, followed by a rise at the end. Starting strong certainly helps to get the word out; the day I launched, it did so well so fast it made it onto the Indiegogo homepage. According to the stats, 1,444e of contributions came direct from Indiegogo, which suggests that people found the campaign from outside my usual channels.
Where on the net are people coming from?
Most of my marketing was done through my email list, and through Facebook. According to the stats, 6,450 came from “direct traffic, email etc.”, and only 2,441 through Facebook. Twitter brought in a princely 50e. My own website, guywindsor.net/, brought in 667. This is a pretty convincing argument in favour of direct marketing, I think!
You can see from this graph below that almost all of the trackable referrals were done using the link associated with me: 8,198 e.
I have edited out the names of the top referrers, because several of them backed the campaign anonymously.
Again this is not a surprise, and does not diminish the excellent and helpful efforts of many kind people. It’s just a fact that nobody does as much publicity as the ones who benefit most directly! My link generated 207 contributions in total from 1855 referrals; 8.96 referrals for every contribution; 4.419e/ referral, average contribution 39.60.
I also ran a referrals competition. There were two categories: eyeballs and sales:
Eyeballs: Whoever sends the most people to see the campaign will get two free copies of the book in hardback, sent wherever you want.
Sales: The person whose referrals generate the highest sales will also get two hardbacks, and can commission an instalment of The Swordsman’s Quick Guide, on any topic you like. I will write the booklet for you and publish it (at my discretion; if your request is vastly off-topic I might choose to simply send you the finished booklet for you to do with what you like).
If the same person wins both categories, I add a runner-up prize; whoever comes second in the sales category gets a free hardback, signed and sent wherever you like.
How do you take part?
You need to log in to Indiegogo, which generates your own specific url for the campaign, which will look like http://igg.me/at/longsword2/x/00000 where the last set of numbers is your unique identifier. Then share this link as best you can, and Indiegogo will track the link for you.
The winners of the competition were:
Cecilia Äijälä 152e from 4 contributions and 334 referrals
Nico Moeller: 150e from 3 contributions and 20 referrals
Gindi Wauchope: 100e from 2 contributions and 53 referrals
Cecilia, the winner, generated four quite large contributions totalling 152e from 337 referrals. That’s 2.217 e/referral, but average contribution 38e.
Referrals are tricky; some kind souls managed to send 40+ people my way, and I failed to sell them a single book. The lesson here of course is that not all traffic is created equal.
Where in the world are people coming from?
It’s also interesting (to me at least) that the contributions by country are quite different to my usual pattern of book sales. In both cases the USA is the biggest market, but here Finland is the next biggest, and by quite some margin. This makes sense given that I introduced historical swordsmanship to the country and have been largely responsible for its spread here, but through normal channels, as far as I can tell, my books don’t do very well here at all! I guess folk are used to being able to ask me in person.
Controversially, I didn’t bother with any perk below 15e for the ebook. This was deliberate. It has been my experience that backers at the lower perk levels are just as, if not more, demanding of my time and attention as those throwing much larger sums at me. The cost:benefit ratio does not work out. I also figured that this was as low as I wanted to go price-wise to sell the book, so what, really, was I going to offer readers who can’t afford my book? I have a ton of free stuff online already, so it’s not as if poorer or less committed people can’t have a fair crack at my work.
This time, nobody went for the “Patron” perk at 1,500e; this was actually a relief, as I wanted to dedicate this book to two friends of mine, but I also couldn’t afford to pass up that kind of money if it was offered. Our glorious Patron Teemu Kari put 25,000e down to become the patron of Audatia, and the excellent Christian Cameron gave 750 dollars to be the patron of Veni Vadi Vici, so it’s worth having these more expensive perks, just don’t rely on them.
These are the perks, and how they performed. I can't get tables to work in WordPress, hence the screenshot from Pages:
The Stretch Goals
Remember, I was sick, and it was the run-up to Christmas. I couldn’t face the idea of creating a bunch of exciting stretch goals that would then commit me to a bunch of work I might not have the energy for. So the first stretch goal was, if we reached 5k, I would bundle two print and play Audatia decks into every perk. I never got round to creating another stretch goal. I felt that the value was there already; backers at even the 15e perk would get The Medieval Longsword in ebook form, Advanced Longsword: Form and Function in ebook form, and the two decks, a total value of about 40e if you bought them all separately.
In sum, the campaign generated 12,093e from 303 contributions from 273 backers.
Think like a writer
If you're a writer, thinking about doing this for your own book, take a moment to observe that most ebooks sell for under 10 euros, and most paperbacks for under 20. Yet in this campaign, the 303 total contributions cost an average of 39.91 euros. In other words, the price anchor that is in force with books, is clearly not present in the same way here, though all I am doing is selling books. The value added, for the reader, is of course the feeling that they are directly contributing to the production of work they value. And they are. I cannot stress this enough: this is not in any way taking advantage of the backers; it's giving them the opportunity to do something they want to do, namely get involved.
So that’s where the money came from: where did it go?
Twelve thousand euros looks and feels like a big pile of cash, at least it does to me. But it is really important for you to see where it all goes, and at the end of the day, how much of it is actually income? It turns out that about 31% of the total raised is income.
Note: The Medieval Dagger order: As you can see, this perk cost me 719.75e to fulfil, and brought in 926e. Of that 926, after Indiegogo's cut, Paypal's cut, and sales tax are taken off, we have, hmmmm: 747 euros, more or less. So that perk made me no money, but, and it's a big BUT: it made a lot of backers very happy
For the first time, I used paid Facebook ads, to see what kind of traction I’d get. I boosted 3 posts, which generated
The Medieval Dagger perk update: 510 reach and 25 clicks for 5e
Something useful from the blog (re meditation) 1867 reach and 91 clicks for 14e
Ad re referrals competition: 672 reach for 23 clicks for 8e
Ad re stretch goal: 460 reach 14 clicks, 5.57
Total spent: 32,57 for a total of 153 clicks.
1841 clicks got 207 referrals and 8198e.
So: average: 4.453e per referral. 153/4.453= 34.36
So, the FB ads probably made a tiny profit, but not when you factor in IGG’s cut, Paypal, printing, shipping, etc. But if these were new readers, from outside my current sphere of direct influence, then that is disproportionately useful, as, if they like these books, they may buy the ones that came before and will come after.
Printing and shipping costs breakdown:
Total books to print:
Paperbacks: printing: 202x 3.74 = 755.48
Hardbacks, printing: 93 x 8.34 = 775.62
setup fees: approx 100 e
transaction fees: 1.95/order = 273 orders total, minus 51 ebook only orders= 222 transactions to process, = 432.90
Total before shipping: 2064
Shipping approx: 1200e
Costs of printing and shipping total estimated: 3264e
Actual total according to my credit card receipt: 3235.99e. Looks like my maths ain't so bad!
And my time?
Let's also take my time into account. Direct work on the campaign itself ran about 8 hours, spread over the month. Time spent manually inserting 250 or so orders into Lightning Source, about 10 hours. Plus probably another 8 hours or so of work that I wouldn't have had to do without the campaign. Figure 26 hours or so. For an income of 3790.19, that's nearly 145e/hour which is much better than what I normally make writing!
What would the book have raised without the campaign?
A paperback of Advanced Longsword: Form and Function sold through the usual channels nets me 12.96e per copy. Multiply that by 202 (the total number of books sold), and we get 2617.97e
And the hardbacks would net me about 25.50 each, times 93 is 2371.50. Together that's 4989.47
But one thing is for sure; in the wild, my hardbacks don’t sell at 50% of the numbers of my paperbacks; a ratio of almost 2:1. more like 140:22 (The Swordsman's Companion sales so far this year, paperback v hardback), or 6.4:1. At that proportion, 295 book sales would be 46 hardbacks, 249 paperbacks, which would net me about 3227+1173=4400, so nearly 600 euros less. Plus, that income would be spread out over several months, maybe a year, and so it would be that much harder to pay for the editing and layout (which are the fixed costs).
So the campaign clearly generated significantly more income than the likely sales through normal channels would have, and more importantly, brought a significant number of new readers.
I wrote this post primarily so that the backer of the campaign could see exactly where the money went. Transparency is key in crowdfunding. But I hope it's also useful to other authors thinking about running their own campaign; seeing how the costs break down, and being able to estimate how much of the money you raise is income should be very helpful. I am very pleased with how this campaign went, and very grateful to my excellent readership who support the work I'm trying to do.
If you have any questions, comments or suggestions, let me know in the comments below; and if you know anyone who is thinking about running a campaign, please share this with them.
*top tip for married men: your wife is always right.