‘The Power And Opportunities Of Crowdfunding Platforms To Finance Global Expansion’
By: Björn van Brakel | Salesupply Inc.
Crowdfunding platforms like Kickstarter and Indiegogo are being used more often by e-commerce businesses as a financial tool to expand their business globally.
E-commerce companies are more often forced to sell across border in order to create sufficient revenue stream. There is a noticeable change in the underlying motivations of businesses to use the services of Salesupply to expand their business cross border. The increasing globalisation forces companies nowadays to sell their products across border. The current free trade associations support businesses to reach foreign markets. However, the related financial costs and risk of international expansion is substantial. Different legal terms and conditions, set up costs, shipping, warehousing etc. create challenges and boundaries. Therefore we see that companies use big crowdfunding platforms like Kickstarter and Indiegogo more often as a tool to finance their expansion. Companies can set a threshold to raise enough money to finance the setup costs for expanding. These platforms also give instant feedback about the demand of the product, this is an excellent opportunity to test the demand of a product.
A pitfall with these crowdfunding platforms is, that they eventually don't support companies with their operational activities. We support crowdfunding e-commerce companies on a daily base with their customer service, online marketing, and the fulfillment of their orders. Many companies underestimate the impact of a successful crowdfunding campaign.
Crowdfunding platforms create multiple advantages for companies to consider if they want to pitch their product on crowdfunding platforms first, instead of using sales channels like Amazon or eBay. These platforms are most commonly used by Chinese firms, which launch new products via Crowdfunding before they produce the product in China.