How to leverage product crowdfunding for your ecommerce company

If you’re thinking of crowdfunding your product, you’ve likely had two major questions come to mind. One: How do you run a successful product crowdfunding campaign? Two: How do you turn a successful campaign into a long-term business?

In this article, we’ll dive into the process from end-to-end, from keeping your campaign organized to building a community to converting your momentum into a long-term business.

Key takeaways

• Think like a long-term business from the start of your campaign. What will happen if your campaign is successful? What manufacturers and suppliers do you plan to work with? How can you use your success to keep the momentum going and turn your idea into a long-term business?
• Community is key. Treat your backers well from the start—over-communicate before, during, and after your launch, and share as many details as possible. You’ll thank yourself in the future.
• Stay organized. Keep all materials handy and campaign finances in one place. Keep your personal and business finances separate, and get a business bank account early-on.
• Prepare for the best—but treat crowdfunding as an experiment. If you fail to raise funds, return to the drawing board and see what you can change.

Crowdfunding is the process of raising funds from a group of individuals, typically through an open call on the internet. There are various crowdfunding models, including equity crowdfunding, which allows you to raise small amounts of equity-backed financing from a group of investors, and debt crowdfunding, which allows you to take out loans from a group of lenders.

Product crowdfunding is the most popular of the lot. Companies often use it to collect small amounts of money from an open audience to back the development of a product. In return, investors stay up-to-date with their product’s journey, receive perks and updates as product development progresses, and eventually receive the company’s product when it’s launched.

Although it differs across platforms, most crowdfunding campaigns share a few common elements.‍

Campaign: A campaign is a project that raises a set amount of funding over a fixed duration of time and allows potential investors to pledge fixed amounts of money towards the creation of a product. In turn, investors become customers, receiving the product or other perks. ‍

Pledge: A pledge is the amount of money that a participant puts towards a campaign. On most platforms, pledges are only converted into payments if a campaign successfully meets its goal. ‍

Backer: Backers are campaign participants who have confirmed a pledge. 

‍Perk: Perks are the digital or physical goods or services provided to backers after a successfully-funded campaign. A perk can be used to reward early and large backers, and is determined by factors like the amount pledged.

If you’ve ever participated in a product crowdfunding campaign as a backer, you know just how much can go wrong—like products that never make it out of idea-stage or perks deliveries that take months to come to backers. Crowdfunding campaigns can be time-consuming and require lots of organization. And yet, as successful crowdfunding campaigns have shown, there are major upsides to doing them well. Here are two examples.

eufyMake

In 2025, eufyMake (a sub-brand of electronics company Anker Innovations) launched its E1 personal 3D-texture UV printer on Kickstarter with a $500,000 goal. The E1 is designed for creators and small business owners who want to print custom designs on products like mugs, phone cases, tote bags, and banners — items that many ecommerce businesses sell. The campaign raised $10 million in its first 14 hours and closed at over $46 million from nearly 18,000 backers, making it the most-funded Kickstarter campaign in history. 

Takeaways: 

• eufyMake offered multiple pledge tiers (from a $499 basic kit to a $2,752 deluxe bundle), giving backers options at different price points. 
• The campaign positioned the printer as a business tool, not just a creative gadget, which gave it wider appeal
• When a campaign raises far beyond its goal, fulfillment becomes exponentially more complex. Delivering 18,000 units on schedule requires manufacturing and logistics that may not have existed when the campaign launched.

Tuft + Paw

Jackson Cunningham, founder of Tuft + Paw, launched a Kickstarter campaign for a modern cat litter box after noticing a lack of high-quality cat products. The campaign raised over $150,000, and Cunningham used feedback from his backers to make changes to the product. Today, Tuft + Paw generates over $1.3M in monthly sales.

Takeaways: 

• Cunningham treated the campaign as both a funding mechanism and a product validation exercise, collecting feedback that shaped the final product. 
• He also built an ecommerce store alongside the campaign so backers could transition to repeat customers. 
• A niche product requires a more targeted marketing approach to find the right buyers.

Build a community from day one

Community is often a secondary thought for ecommerce companies. Many brands launch products, sell to a bunch of customers, and start to think about how to turn those customers into their community afterward.

However, when you try to build a community around a product, it can be challenging to motivate members to see value beyond the product itself. Crowdfunding forces you to pitch your product as a bundle—you’ll need to market its importance as a product as well as the vision behind it, how it fits into the world, and how it might enrich your potential backers’ lives.

That means your backers are also buying into this bundle. By getting a group of customers who—at least, somewhat—agree with your brand’s mission, your product’s values, and your thesis on how their lives will improve with it, you can build a value-focused community from day one. And you can keep this community going over time, with newsletters, social content, and other forms of engagement long after the campaign.

Lower your financial risk

When interested customers offer pledges, they’re footing the financial risk if something goes wrong while you’re producing and distributing your product. And it’s not uncommon for things to go wrong—Kickstarter has gone well out of their way to make sure backers know they are not a store.

However, don’t take this as permission to abandon projects. Following through with your initial product can make or break your future success. It’s one thing if you don’t raise enough funding. But if your campaign is funded and you don’t deliver, you’ll have a hard time convincing anyone that your brand should be taken seriously.

Test product/market fit

Taking a project from idea to product is daunting. What if you’re excited about your idea but nobody else wants it? Or maybe you know it will be a hit, but you’re not quite sure if you’re marketing it the right way. A crowdfunding campaign can help determine if you’ve nailed your product and marketing—or allow you to decide to return to the drawing board.

For example, if you’re gaining traction on social media or your newsletter, but it hasn’t translated to campaign backers, it might not be your product’s fault—an incredible product with a poorly communicated campaign can fall flat, no matter how great it is. Collect as much feedback as you can along the way. That way, if you do need to come back with a new-and-improved campaign, you just need a better story—not a better mousetrap.

Potential for free marketing and a chance at viral success

If you’ve heard of products that have done well with crowdfunding, they’re usually not the slow-burn ones that just squeak past their campaign goals at the last second. With the right work put in pre-launch (and a little bit of luck), campaigns can rocket past their goals. And a well-crafted campaign can get picked up as a “staff pick” or get attention from media that can help drive virality.

Of course, popularity comes with its problems—getting too many backers means you have to figure out how to fulfill orders of magnitudes more than originally planned, along with an influx in support questions.

Raise funds without diluting your business ownership

Unlike venture capital or equity crowdfunding, product crowdfunding allows you to keep complete ownership of your business. You might still want to set your business up as an LLC. LLCs are more secure than sole proprietorships and can protect your personal assets during and after the campaign.

Want to hear directly from an ecommerce founder? Watch our video with Mango Puzzles co-founders Kemal Didić and Svet Lovoukhin on establishing their financial fundamentals:

Before you launch, it’s important to pick the right product crowdfunding platform for your campaign. The three most common options for ecommerce founders are Kickstarter, Indiegogo, and storefront pre-order apps (like Crowdfunder or Fundlify on Shopify). Each has its own funding model, audience, and fee structure.

Which platform is right for me?

• Choose Kickstarter if you want access to a large community of backers and the credibility that comes with an all-or-nothing model. 
• Choose Indiegogo if you want flexible funding or plan to continue raising capital after your initial campaign ends. 
• Choose a storefront pre-order app if you already have an audience and want to keep full control of the customer relationship (and avoid percentage-based platform fees).

Each crowdfunded product launch follows three phases: pre-launch, launch, and post-campaign. Here’s what to focus on in each phase.

Pre-launch

The pre-launch phase is where most of the work happens. Your goal is to validate your product idea, build an audience, and prepare every asset you’ll need before the campaign goes live.

Establish your product idea

Come up with a product idea. Test its potential by asking a few questions.

• What is it?
• How is it used?
• Does it solve a problem or make a users’ life better?
• Is it unique?
• Is it something that a crowd would love that might do well on crowdfunding?

The answers to the last two questions are important ones. While the first three are general questions that can help you understand if you have a worthwhile business, the last two touch upon an important aspect of crowdfunding: virality.

Develop your target customer

Once you know what you’re selling, narrow down who you want to market your product to. A product designed for everybody is a product for nobody. Create a target customer persona. Figure out the demographic they fit into, their challenges, and their goals. This persona will help you craft a compelling story for backers when you draft your campaign.

Find your suppliers and manufacturers

If your campaign is successful, you’ll need to fulfill your end of the deal and get the product to your backers. Find manufacturers and suppliers so you can be prepared after the campaign. Order samples to check production quality—you’re putting your product and brand’s reputation into the hands of your manufacturers and suppliers.

You will also want to ensure that you have volume-based pricing agreements and manufacturing guarantees set up well in advance so you aren’t starting the process anew when your campaign goes well.

Tip: Stay away from manufacturers that want you to sign a guarantee that you will pay them regardless of your campaign’s outcome. You’ll be working with these partners for months—even years—and you want to be in business with someone you trust.

You’ll also need to determine your cost of goods and shipping for each item to figure out how much money to raise through the campaign.

• Here's a tip: these details can help you market your campaign. For example, some brands put together a manufacturing and fulfillment timeline and upload it to their profiles to show that they’ve done their homework and are ready to get the ball rolling. This will give potential backers confidence that you can fulfill their pledges.

Select a crowdfunding platform

There are many different places for you to host your campaign. The most popular are Kickstarter and Indiegogo. The most significant difference between the two is the outcome of unsuccessful campaigns. As of 2022, Kickstarter only provides you with funds if you are successful. Indiegogo, on the other hand, allows you to access funds that have been pledged even before the campaign is finished. That might make Indiegogo seem like a no-brainer, but crowdfunders should keep in mind that campaigns on Kickstarter have far higher success rates than those on Indiegogo.

Alternatively, you can use an app connected to an ecommerce store, like Crowdfunder by Ethercyle, which lets customers crowdfund products as pre-orders. With Crowdfunder, you “own” all of the traffic—customers are already on your site and are engaging with your branding, promotions, and newsletters. On the other hand, it will be harder to drive traffic there. It often has to be earned or bought with advertising.

Create marketing material and build pre-launch buzz

You will need to create marketing material that fits your crowdfunding platform’s specifications. The more your campaign makes you look like a brand that can deliver and less like “just some person with an idea,” the more likely it is that potential backers will have confidence in your product.

Start building buzz before you launch your product. Setting up social media accounts can also help your brand and product get legitimacy and increase the likelihood of success—and it can also get the creative juices flowing to help you with all the other collateral you will need to launch a successful campaign.

If you’ve got a larger project with a bigger budget, you can tap into a crowdfunding marketing agency. For example, Jellop takes a percent of the total amount pledged to help you with your marketing. They’ll help you get the word out and connect you to influencers.

Of course, you don’t need an agency to be successful—you just need a plan.

Create product images or mockups early on. Throughout your campaign, you can resize these product images to fit your needs. You may even want to combine them with timelines and other graphics to create reference material for potential backers.

You’ll also want to create a project video that shares your story—not only what your product is, but also the why, how, and who behind it. Many entrepreneurs put themselves or their teammates in front of the camera to humanize the project and tell a more cohesive story.

Pre-launch checklist:

• Validate the product idea with target customer research
• Identify manufacturers and suppliers and order samples
• Calculate the cost of goods, shipping costs, and the campaign funding goal 
• Select a crowdfunding platform
• Create campaign page assets (product images, video, copy)
• Set up social media accounts and pre-launch email list 
• Draft manufacturing and fulfillment timeline for the campaign page

Launch

It’s time to launch… get ready for the excitement and (hopefully) a lot of activity.

Design your crowdfunding campaign structure

Before you launch, you’ll need to plan out how your campaign will be structured. Track everything in a single place, like a spreadsheet. There are many free templates available online.

Start by figuring out the different prices you’ll charge across perk levels. You can base this on the cost of goods sold (COGS), which includes the price of manufacturing along with the combined costs to make the product—like marketing (design, website hosting), production, post-campaign support, any patents you need to register or acquire, and more.

Remember: You’re not just trying to break even. Earning profit is a balance, and your backers will know if the product they receive is low quality or overpriced.

Try to resolve other important questions before launching:

• How will you keep track of who gets what after launch?
• How will you provide value to backers before they receive your product? Will you send them updates? Small goodies to keep them plugged in?
• Will you offer stretch goals (like new product variants or bonus gifts) to incentivize trackers to help you hit — and exceed — your campaign target?

Go live

Upload your assets onto your platform long before your launch date. When the day comes, throw as much gas on the marketing fire as you can. Invite friends, family, coworkers, and strangers on the internet to share and back your campaign. With any luck, the platform you’re running your campaign on will take notice and promote you to their wider community of crowdfunding enthusiasts. You can also launch in tandem on other product-sharing platforms like Product Hunt and cross-link to your campaign to give your project a boost.

Make sure to provide regular updates to backers and subscribers during the campaign. If you have stretch goals, highlight your progress towards them to keep the energy high.

Launch checklist: 

• Set your pricing and perks (including stretch goals)
• Review your final campaign page copy and publish 
• Send the Day 1 announcement sent to your email list and social channels
• Plan your update schedule (at minimum weekly during the campaign)
• Reach out to media outlets and influencers
• Cross-promote on Product Hunt or similar platforms

Post-campaign

If your campaign is successful (or if you’re using Indiegogo to access the funds before the campaign is even done), you’ll want to put all information into a single source of truth, like a spreadsheet. This includes the amount of money pledged, who pledged it, the perk tier each backer is in, and how you’re tracking who helped you hit your stretch goals.

Keeping these numbers organized is an integral part of being able to reach out to your manufacturing and packaging partners to get production started.

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Act like a business

By the time your campaign is closed, you should have incorporated your business. Incorporation is an integral part of protecting your personal finances as you start to sign production and shipping contracts.

Incorporation is also a good time for reflection. Start to consider what might be next for your business as you begin the fulfillment and post-purchase process. Was your product a one-off success, or do you want to create a line of products? Are there ways you can make improvements to launch a second version? How can you tap into the love your backers have shown for your vision?

Put your funds somewhere safe

You may be tempted to connect your crowdfunding platform to your personal bank account and leave deposit funds there. That’s not the best solution if you want to turn your campaign into longer-term success.

While your personal bank might have business accounts, they aren’t focused on helping your new business succeed. Find a business-focused financial service provider (like Mercury) to help you move funds quickly and efficiently, especially if you’re dealing with backers and manufacturing partners around the world.

A business bank account can provide tools for your product to tap all the necessary levers to turn into a full-fledged business, like storing existing funds to possibly earn a yield when you’re not using them.

Post-campaign surveys

Surveys can be used to confirm perk selections, contact information, and shipping details. They can also be used to upsell additional perks after the campaign is done. They’re especially useful if your product and perks have complexities and different levels. While platforms like Kickstarter and Indiegogo have natively-built surveys, there are also third-party services like Backerkit that can help with the process.

Get the product in your backers’ hands

Get products to your backers as soon as possible. Send digital items right away, and regularly update backers with progress or hiccups during the manufacturing process. This can help keep confidence high. Share pictures and updated timelines. Transparency and honesty can help pad any complaints from delays.

Make the process as enjoyable as possible so your campaign backers can feel like they’re part of your community.

Post-campaign checklist:

• Consolidated backer data in a single source of truth
• Send a post-campaign survey to confirm perk selections and shipping details
• Incorporate your business (if not already)
• Open a business bank account to deposit campaign funds 
• Communicate the manufacturing timeline to backers

Regular communication is one of the biggest factors in a successful crowdfunding product launch. Backers want to know what’s happening with their money, and silence is a fast way to erode trust. 

Here are some templates for ongoing campaign communications.

Pre-launch teaser

When to send: 2-4 weeks before launch, to your email list and social followers. 

Example: “We’ve been working on something in the background, and we’re almost ready to share it! [Product name] is a [one-sentence description]. We’re launching on [platform] on [date]. Sign up to be notified when we launch! [link].”

Metrics: Email sign-ups and social engagement (shares, saves).

Day 1 launch announcement

When to send: The morning of launch day, via email and across all channels.

Example: “It’s live! [Product name] is now on [platform]. Early backers get [specific early-bird perk or discount]. Back us in the first 48 hours and you’ll be among the first to receive [product]. Here’s the link: [link].” 

Metrics: Percentage in first 24 hours and backer count.

Mid-campaign momentum update

When to send: Weekly during the campaign, posted as a campaign update on the platform and shared on social media. 

Example: “We’re [X]% funded with [Y] days left! Here’s what’s happened since last week: [production milestone, media feature, or backer milestone]. Thank you to everyone who’s backed us so far. If you know someone who’d love [product name], share this campaign with them: [link].”

Metrics: New backers per update and referral traffic.

Stretch-goal reveal

When to send: When the campaign hits its initial funding goal (or another milestone). 

Example: “We hit our funding goal! To celebrate and keep the momentum going, we’re introducing some stretch goals. At [dollar amount], every backer will receive [bonus item or feature]. At [higher amount], we’ll unlock [additional reward]. Help us get there by sharing the campaign: [link].” 

Metrics: Increase in funding after the announcement and social shares. 

Delay or issue update for transparency

When to send: As soon as a delay or issue is confirmed. Do not wait. 

Example: “We want to share an update with you: [describe the issue, such as a production delay, materials shortage, or shipping complication]. Here’s what this means for your timeline: [revised estimate]. Here’s what we’re doing about it: [specific actions]. We’ll update you again on [date]. Thank you for your patience.” 

Metrics: Comment sentiment and refund request volume.

Post-campaign shipping notice

When to send: When fulfillment begins, and again as each batch ships. 

Example: “Great news! Production is complete, and we’re starting to ship! Batch 1 (backers #1–[X]) ships this week. You’ll receive a tracking number within [timeframe]. Batch 2 ships on [date]. If you need to update your shipping address, please let us know by [deadline].”

Metrics: Delivery confirmation rate and support ticket volume. 

Before you launch a crowdfunding campaign, you need to understand your legal obligations. Crowdfunding products come with real responsibilities to your backers, and both the platforms and federal regulators have rules you must follow. 

Platform rules and creator obligations

Kickstarter’s Terms of Use (Section 4) requires creators to complete the project and fulfill each reward, or refund backers whose rewards cannot be fulfilled. Creators who fail to deliver may be subject to legal action by backers. Kickstarter is clear that transactions are between the creator and the backer, and Kickstarter does not issue refunds directly. (See: Kickstarter Terms of Use)

Indiegogo’s Creator Guidelines similarly state that creators are “solely and fully responsible” for project performance, reward delivery, and compliance with applicable laws. Creators must publish a refund and cancellation policy before launching and cannot change those terms for existing backers. Indiegogo also reserves 5% of funds raised for 180 days to cover potential refunds and chargebacks. (See: Indiegogo Creator Guidelines and Indiegogo Reserved Funds Policy).

Federal consumer protection

The Federal Trade Commission (FTC) monitors crowdfunding campaigns for deceptive practices. The FTC has brought enforcement actions against creators who misrepresented how the funds would be used or failed to deliver promised rewards. In guidance published on its Business Blog, the FTC advises crowdfunding creators to: keep promises about rewards and refunds, and use funds only for the represented purpose. 

Backer expectations and refunds

Your backers are not traditional customers. On Kickstarter, pledges are a commitment to support a project, rather than an actual purchase. On Indiegogo with flexible funding, backers may expect more purchase-like protections. 

Regardless of platform, you should clearly state your refund policy on your campaign page. If you offer refunds, specify the conditions and timeline. If you don’t, make that clear before anyone pledges.

VAT, duties, and international shipping

If you’re shipping to backers outside the United States, you may need to factor in value-added tax (VAT) and import duties. Backers in the EU, UK, and many other countries may be charged customs fees upon delivery. You should communicate this clearly during the campaign so backers aren’t surprised by unexpected costs. 

Some creators build estimated duties into their shipping tiers, while others let backers know they’ll be responsible for local import charges.

Intellectual property

Publishing your product idea on a crowdfunding page makes it visible to anyone, including potential competitors. If your product includes patentable technology or a distinctive design, consider filing for a provisional patent or trademark before launching. This won’t guarantee protection, but it establishes a priority date and shows that you’ve taken steps to protect your intellectual property.

Even after your product is delivered to your backers, stay in touch with your community. They’ll probably be interested in whatever your new business does next. Update social channels consistently so backers can reach out if they need support and share business updates through newsletters.

If your crowdfunding campaign was successful, it has the potential to become something more — all you need to do is remain engaged with your community.

To watch the rest of our five-part video series on building and running an ecommerce business, visit our playlist.

What is the ideal campaign length for product crowdfunding?

Most successful campaigns run for 30 days. Kickstarter and Indiegogo both allow campaigns up to 60 days, but shorter campaigns create more urgency. A 30-day window gives you enough time to build momentum without letting excitement fade.

What are the typical fees for a crowdfunding platform?

Kickstarter charges a 5% platform fee plus 3% + $0.30 per transaction in payment processing fees. Indiegogo charges a 5% platform fee plus 3% and $0.20 per transaction. Storefront pre-order apps typically charge a flat monthly subscription (around $24–$49/month) with no percentage-based platform fee. 

How often should I provide updates during a crowdfunding campaign?

During the campaign, aim for weekly updates. After the campaign, shift to biweekly or monthly updates during production and fulfillment. Always send an update immediately if there’s a delay or issue. 

How quickly will products ship after crowdfunding is completed?

Timelines can vary widely depending on your product’s complexity and the lead times of your manufacturer. Many campaigns estimate delivery 6-12 months after the campaign closes. Be conservative with your estimates. Delays are common, and setting a realistic timeline upfront reduces frustration from your backers.

Are backers of a crowdfunding campaign the same as customers?

Not exactly. On Kickstarter, backers are supporting a project, not making a traditional purchase. There’s no guarantee of delivery, though creators are legally obligated to make a good-faith effort to fulfill rewards. On Indiegogo with flexible funding, the relationship is a bit closer to a pre-order, but the same risks apply. Your campaign page should make this clear to your backers.

When are the funds from crowdfunding platforms disbursed?

On Kickstarter, funds are collected from backers’ credit cards when the campaign ends, only if the goal is met. Funds are typically transferred to your account within 14 days. On Indiegogo with flexible funding, funds can be disbursed before the campaign ends, though Indiegogo reserves 5% of funds for 180 days to cover potential refunds and chargebacks. With storefront pre-order apps, payment is collected at the time of the order and deposited into your business bank account per your payment processor’s standard schedule.