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Their margins aren't that high. They charge 5%, and I think ~3% goes to Amazon, so on this they'll make ~$20k. And since most projects are much smaller, I'd gu
by jackowayed 16y ago
Their margins aren't that high. They charge 5%, and I think ~3% goes to Amazon, so on this they'll make ~$20k.
And since most projects are much smaller, I'd guess that in an average month, $1M is roughly the sum of all of their pledges. $20k/month is not a lot to run a business on. So I'd guess that they've taken investment.
- StavrosK 16y agoAh, true. I thought their margin was double that. They scale very well, however, since new projects cost them barely anything (just pageview bandwidth). I'd imagine that most of that money just goes in their pockets, which is still quite good for the future.
- ryanlchan 16y agoThis is incorrect. The 5% fee is actually charged in addition to Amazon's fees. (see https://www.kickstarter.com/help/faq#WhatFeesDoesKickChar https://www.kickstarter.com/help/faq#WhatFeesDoesKickChar). This doesn't make much of a difference in profitability (20k vs 50k still isn't a whole lot), but it's something. Enough, at least, to keep bootstrapping. And that's the main point of it - not to make a whole bunch of money, but to offer a really great service. As evidence, the Kickstarter guys have been going for a few years now, and it wasn't until very recently that they started taking any money out. They're really passionate about helping artists, filmmakers, and creatives find the funding that they need.