The Fees of Kickstarter and Indiegogo: A Comprehensive Guide

When launching a crowdfunding campaign, it's essential to understand the fees associated with using popular platforms like Kickstarter and Indiegogo. Both platforms charge fees to creators, but their structures differ slightly. This article will break down the fees of each platform, providing creators with the necessary information to budget effectively.

Understanding Kickstarter Fees

Platform Fee: Kickstarter charges a 5% fee on the total funds raised. This means that for every $100 raised, $5 goes to Kickstarter as a platform fee. It's a straightforward and transparent fee structure.

Payment Processing Fees: These fees are charged by payment processors and can vary based on the payment method and country. Typically, these fees range from 3% to 5%. For example, if you use a credit card processor like Stripe, the fees can range from 2.9% to 3.9% plus a fixed fee per transaction. It's important to account for these additional costs when setting your campaign funding goal.

Total Estimated Fees: In total, the fees can range from about 8% to 10% of the total funds raised. This includes the 5% platform fee and the variable 3% to 5% payment processing fee. Creators should plan for taking home 90% of the funds raised.

Understanding Indiegogo Fees

Platform Fee: Indiegogo charges a 5% fee on the total funds raised. Similar to Kickstarter, this fee is transparent and consistent across all campaigns. The fee is deducted from the funds that you actually raise, not the funding goal you set for your campaign.

Payment Processing Fees: Indiegogo also has payment processing fees, which can range from 3% to 5% depending on the payment method and country. The payment processor (like Stripe) charges a transaction fee, usually around 2.9% to 3.9% plus a fixed fee per transaction. Indiegogo's processing fee will be deducted from the amount available for you to reserve.

Additional Considerations: Indiegogo offers a flexible funding option, which allows you to keep the funds raised even if your campaign does not reach your funding goal. However, this option may incur higher fees. Also, there may be a wire transfer fee, especially if your bank account is located outside the United States. For a typical US-based account, this fee is $25.

Fixed Funding vs. Flexible Funding

Fixed Funding

With fixed funding, the campaign is only successful if the funding target is met. You only get the funding and start fulfilling pledges if the campaign reaches its goal. If the goal is not met, the campaign is canceled and no funds are collected. Generally, there are no additional fees for fixed funding campaigns.

Flexible Funding

Flexible funding allows you to keep the funds raised even if you do not meet your funding goal. This can be a risk for creators, as it may attract more pledges. However, if this model is chosen, Indiegogo will deduct a higher fee, usually around 6% to 7% of the total funds raised, in addition to the payment processing fees. Please note that for flexible funding campaigns, there are no refunds for contributors if the campaign is canceled or fails to reach its goal.

Conclusion

Both Kickstarter and Indiegogo charge fees that include a platform fee and payment processing fees. The total cost can vary based on the funding model chosen and the payment processor used. It's crucial to understand these fees to effectively budget for your campaign and to communicate transparently with your supporters.

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