Launching a Kickstarter campaign can feel overwhelming. You’ve got your product idea, your marketing strategy, and your launch timeline all mapped out. But how much does a Kickstarter campaign cost?
What catches most creators off guard is that the true cost of running a successful Kickstarter campaign goes beyond the platform’s advertised fees.
While Kickstarter is an incredibly powerful crowdfunding tool that can turn your idea into reality, you need to understand every fee, every deduction, and every hidden cost that’ll come out of your raised funds. Because nothing kills a successful campaign faster than discovering you don’t have enough money left to actually fulfill your promises to backers.
Let’s not let that happen.
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Contents
Key Takeaways
- Kickstarter charges a flat 5% platform fee on all successful campaigns
- Payment processing fees range from 3-5% plus transaction fees depending on pledge size
- Dropped pledges typically cost creators an additional 3-5% of total funds raised
- Tax obligations and shipping costs can significantly impact your final budget
- Proper budgeting and planning can help minimize surprises and maximize your campaign’s success
Kickstarter Fees Breakdown: What You’re Really Paying As a Creator
With two main categories, Kickstarter’s fee structure is actually pretty straightforward on the surface.
Kickstarter Platform Service Fees: The Fixed 5%
Let’s start with the bigger one. Kickstarter charges a flat 5% platform fee on the total amount you raise.
This fee is non-negotiable. So don’t go trying to do a deal with Kickstarter to get that fee lower. Quick side note, if you’re comparing Indiegogo vs Kickstarter in terms of fees, they are basically the same.
If you raise $10,000, Kickstarter takes $500 right off the top. If you raise $100,000, they take $5,000. The percentage stays exactly the same regardless of your campaign size or success level.
Kickstarter Payment Processing Fees
The second major fee category is payment processing. These charges vary depending on the size of each individual pledge:
- For pledges over $10: 3% + $0.20 per transaction
- For pledges under $10: 5% + $0.05 per transaction
Let’s say you raise $10,000 from 100 backers. Your payment processing fees would be:
$10,000 x 3% = $300
PLUS
100 backers x $0.20 = $20
Total payment processing fees: $320
When Are Kickstarter Fees Deducted?
Kickstarter operates on an “all-or-nothing” model – meaning backers aren’t charged unless your campaign hits its goal.
Even then, their cards aren’t charged until the very end of your campaign. So if you don’t hit your campaign goal by the time your campaign ends, your backers are not charged, and you owe nothing to Kickstarter.
Once your campaign successfully ends, Kickstarter takes up to 14 days to process payments from backers. This gives them time to handle any failed payments and lets backers update their payment info if needed.
After that 14-day processing period, Kickstarter deducts their fees and transfers your funds to your linked bank account. Depending on your bank, this transfer can take an additional 3 to 5 business days to show up in your account.
So plan for about 3 weeks total from campaign end to actually having your money in hand.
How to Calculate Total Kickstarter Charges
Here’s the basic formula for calculating your total Kickstarter fees:
- Platform Fee: Total raised x 5%
- Payment Processing: (Total raised x 3%) + (Number of backers x $0.20)
- Total Kickstarter Fees: Platform fee + Payment processing fees
Using our $10,000 example with 100 backers:
- Platform fee: $10,000 x 5% = $500
- Payment processing: ($10,000 x 3%) + (100 x $0.20) = $320
- Total Kickstarter fees: $820 or 8.2% of funds raised
Now here’s where things get interesting. The fees I just outlined are just what Kickstarter takes directly. But there are several additional costs that come straight out of your raised funds that most creators never see coming.
Dropped Pledges: What They Are and How to Handle Them
Here’s the first sneaky cost that catches a lot of creators off guard: dropped pledges.
Because Kickstarter doesn’t charge backers’ payment cards until the campaign ends, there are always a portion of your backers whose payments fail. This could be because of expired credit cards, insufficient funds, or fraud protection from their bank.
If this happens, they do have 7 days to update their card in Kickstarter, but if they don’t, they will become a “dropped pledge” – meaning you do not get their money and you don’t have to deliver them a reward.
It’s typical to see 3 to 5% of pledges drop, so you want to budget that in. If you’re counting on every dollar to hit your production targets, these dropped pledges can mess with your plans if not accounted for.
My recommendations? First, budget for it. And second, send reminder messages to backers whose credit cards fail that they have to update their card. This extra push usually gets a good amount of them to update their payment cards.
Taxes and Regulatory Costs
In general, funds raised on Kickstarter are considered taxable income. Yeah, the IRS wants their cut of your crowdfunding success.
But if shipping outside the US, it gets even more complicated. You may also need to deal with sales tax or VAT if you’re shipping physical products as rewards. This is especially true if you’re shipping to backers in the EU, where VAT regulations are strict.
Here’s what Kickstarter does to help: they operate as a marketplace facilitator and collect sales tax for items shipped to all 50 US states. They also collect VAT on items shipped to backers in the EU and the UK through their pledge manager.
With all that said, you’re still responsible for understanding your tax obligations. Kickstarter highly recommends talking to an accountant or tax advisor to make sure you’re compliant with applicable tax regulations.
And keep detailed records of your project’s finances. You’ll need to report this information when you file your taxes.
Shipping & Fulfillment Surprises
The third hidden cost is shipping, and this one can be a real budget killer if you’re not careful.
While not technically a Kickstarter fee, shipping costs come straight out of your raised funds. And they can add up fast, especially for international backers.
Domestic shipping is predictable enough. But international shipping? That’s where things get really expensive. You’ve got customs fees, VAT, additional carrier charges – it all adds up.
Here’s my recommendation: use Kickstarter’s pledge manager to collect shipping costs. Don’t try to estimate shipping during your campaign and bake it into your pledge levels. This can be a recipe for disaster when creators often ship their products 6 to 12 months after the campaign ends.
The pledge manager lets you collect exact shipping costs based on each backer’s location and their specific reward. It’s way more accurate, and it saves you from eating unexpected shipping costs.
Plus, the pledge manager can handle tax collection for you, which makes your life a lot easier.
Tips for Reducing Your Kickstarter Campaign Costs
Now that you understand the full cost structure, let’s talk about how to minimize these expenses and avoid financial surprises.
Account for Taxes and Fees Early in the Planning Stage
The biggest mistake creators make is not budgeting for these costs upfront. Before you even launch your campaign, create a detailed project budget that includes all Kickstarter deductions and service fees.
I’d recommend budgeting for about 15% in total fees and costs beyond your basic production & marketing expenses.
Use Pledge Managers for Post-Campaign Collection
Don’t try to estimate shipping costs during your campaign. Use tools like Kickstarter’s Pledge Manager to collect exact shipping costs after your campaign ends.
The pledge manager lets you collect precise shipping fees based on each backer’s actual location and reward selection. This prevents you from eating unexpected shipping overages that could kill your margins.
Avoid Overpromising on Rewards
Create reward tiers strategically to control fulfillment and shipping costs. Don’t offer rewards that require expensive shipping or complex fulfillment processes unless you’ve carefully calculated those costs.
Remember, every additional reward tier adds complexity and potential cost overruns to your campaign.
Message Dropped Backers to Fix Their Payment Cards
Send direct messages to backers whose payment cards fail. You can do this using Kickstarter’s direct message functionality. Make the message short and sweet:
Hey [first name], it looks like your payment failed to go through. Just login to your Kickstarter account and update your card info ASAP. If you don’t by [date], I won’t be able to send you [your product name]. Let me know if you have any questions!
This is usually enough to get a good percentage of the dropped backers to fix their payment cards.
Final Thoughts
Understanding Kickstarter’s fee structure is absolutely critical for campaign success. While the platform offers incredible reach and powerful tools for creators, you must be diligent in planning, forecasting, and budgeting all associated costs.
The 5% platform fee and 3% payment processing fee are just the beginning. When you factor in dropped pledges, taxes, and shipping costs, you’re looking at potentially 15-20% of your raised funds going to fees and expenses.
But don’t let this discourage you. Kickstarter remains one of the most effective ways to launch a product and build a community around your idea. The key is going in with realistic expectations and a comprehensive budget that accounts for all these costs.
If you want some help with Kickstarter budgeting and beyond, we can help. Click here to set up a time to chat with my team. We’ll discuss your product and put together a launch plan.
How Much Does Kickstarter Charge: Frequently Asked Questions
What Percentage Does Kickstarter Take From Your Campaign?
Kickstarter charges a flat 5% platform fee on all successful campaigns. This fee is only charged if your campaign reaches its funding goal. If you don’t hit your goal, you pay nothing to Kickstarter.
Are There Any Fees Besides Kickstarter’s Platform Fee?
Yes. In addition to the 5% platform fee, you’ll pay payment processing fees charged by the payment provider, not Kickstarter itself. These fees are 3% + $0.20 per transaction for pledges over $10, and 5% + $0.05 per transaction for pledges under $10.
When Do I Receive My Kickstarter Funds?
After your campaign successfully ends, Kickstarter takes up to 14 days to process payments from backers. After that processing period, they transfer your funds (minus fees) to your linked bank account. Depending on your bank, this transfer can take an additional 3 to 5 business days to appear in your account.
Plan for about 3 weeks total from campaign end to having your money in hand.
How Much Should I Budget for Hidden Kickstarter Costs?
I’d recommend factoring in an additional 10-15% beyond Kickstarter’s visible fees to cover dropped pledges, taxes, and shipping uncertainties. This means budgeting for 15-20% total deductions from your raised funds when planning your campaign finances.
Can I Avoid Paying Kickstarter Fees?
No, the platform fees are mandatory on all successful campaigns. However, you can maximize the value you get from those fees through strategic budgeting, careful reward structuring, and using Kickstarter’s tools like the pledge manager to minimize additional costs like shipping overages and tax complications.
