On the whole, my argument has been that you might as well make your own website if you're aiming high in the amount that you're looking to crowd fund. It might be worth it when you're trying to raise a few thousand dollars, it's just not worth it when you're trying to raise a hundred thousand or more. The cost of paying someone to make a simple webpage is around 100-200 dollars. Making one where there's a shopping cart or other methods for accepting money will go into the thousand range, but a simple web page or two with donating options similar to those kickstarter has is likely not going to cost you over 5k. It's likely you'll have money left over to invest in the pitch itself.
Door kickers[/urls] does this and is quite successful at attracting gaming media attention and saving themselves some money.
To say card companies do nothing is frankly laughable. They provide an infrastructure and most importantly customer security that allows transaction to occur.
You are right, I was using hyperbole when I said card companies do nothing.
They allow pretty much anybody in any country to buy your product and transfer fund quickly and securely. No they are not perfect but they provide an essential service. If you don't like the charge then simple - dont take credit cards as a payment mechanism... Nobody forcing you...
They are far from perfect, while they might not be doing nothing, I think the general tone of my previous posts is clear that they don't do enough to warrant the rates of which they charge, let alone the other fees that they charge on top of this.
Now PayPal is different - more expensive for very little and as a merchant even less security or protection.
Yeah, I never liked paypal as well. Though it has not given me any trouble compared to other people.
The thing to remember is that its a percentage - 2.5% isn't much all things considered. Take apple - 30% cut on the App Store there...
There are two things I keep in mind when I'm are being charged a percentage in what I've make. The buying value of the sum that they're taking, and whether their costs are anywhere near the amount being charged for me. Five thousand dollars as you say might not be very much in terms of one hundred thousand dollars, but the sum of five thousand dollars can do a whole lot. For a person making 30 thousand dollars a year, it's two month's pay. From another perspective, would anyone like it if they have to pay 2.5% more tax on everything? Surely for anyone who has received a pay check before, they've noticed that these percentages tend to add up, resulting in a massive chunk missing from the previous amount.
The second issue is that they're not really doing enough to justify retailers paying them that much. It costs them five time less than the amount they're charging card swipes for all the security, infrastructure, and administrative costs. Doubling, tripling, or sometimes even quadrupling the cost and getting away with it isn't unheard of in business, but making 5 times in profits of the cost of making the product is a bit too much in terms of what you're charging, especially when the groups doing so sits in a significant majority of the market share.
As for the Apple issue, they do deserve that much. Much of it due to their practices in making their products a exclusive system that draws a great deal of money out of their customers. Their branding in other words, and their efforts at building their brand both intangibly and physically is well wroth that 30% due to how much business that's being brought in even if they're charging for way more than their competitors. Course you could just go with Android and sell your app at the same price and make far more, which support my point.
Card companies don't have to bother with branding, or at least the biggest companies, like visa and mastercard. They solely rely upon having cornered the banking institutions into flooding the market with their cards, thus making the significant majority of the purchases having require their machines.
Likewise for kickstarter, they do even less than this. Yes it's a great idea and is worth something for that, but for me it still fails at the second issue. For small projects it seems reasonable to charge 5%, but for things bigger than a hundred thousand, it seems a little unreasonable given that the same level of work is given for both.
Now kickstarter... Whilst they don't directly 'do' anything they are no different to spending money on google Adwords. It's advertising plain and simple as you are trying to use their site as a basis for reaching customers that otherwise you wouldn't be able to reach.
Personally, 5% of a funded project is good value. Lets say you raise 100k in funding... So you pay 5k. Sorry, but if somebody said to me 'if you give me 5k I'll give you 95k back then I'd bite their arm off. For comparison purposes, throw 5k at google an see if that generates 100k of revenue... (Hint - it won't).
Whatever that's being argued, comparing it with very bad example isn't going to help the argument being posited. There are advertisement companies out there that are really effective and have a substantial impact. But Kickstarter is not advertising- they receive and process money from people. As well as that 95k likely won't exist as stringless from the site. While in some local areas they may not be counted as a retailer, the money that people receive who successfully fund is treated as profits, and most tax collecting bodies will only really care about that part.
But again, the context of the post you're replying to, is working on the basis that there's an alternative to kickstarer: making your own website and putting your pitch onto it to avoid that 5%. And lets not forget, that 95k doesn't exist as a whole, depending on what you promised, a good deal of it might be diverted to the rewards that was promised, and the costs of bringing those rewards to bear (administrative, brokerage, deliveries, time, etc.). And lets not forget, the tax that the total would be subjected to if it is above a certain amount, and the accounting fees to handle that if you're not doing your own accounting. With all that in mind, that 5k will be sorely needed, especially considering the costs of actually developing the product including living expenses and/or salaries. There's not going to be that much left afterwards, and the issue of who is really doing the work in the relationship that raised the capital is going to hang at the forefront.
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