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Indiegogo 'Guaranteed Shipping' Will Ensure Refunds If Campaigns Fail (engadget.com)

Posted by BeauHD on from the money-back-guaranteed dept.

Indiegogo will start offering "guaranteed shipping" on some crowdfunding campaigns through a pilot program starting next year. Creators who choose to partake in the pilot will promise to users that their product will be delivered. If they fail to fulfill that promise, supporters will get their money back. Engadget reports: Details on how the guaranteed shipping process will work are still pretty sparse, as Indiegogo plans to experiment with it. Creators will have to opt-in to the program. When they do, they will be given a "guaranteed shipping" badge or icon that will appear on their page to inform potential backers of the pledge. Per Indiegogo, in certain cases, some funds may be withheld from the creator until they can confirm that they will be able to ship their products on time. The guaranteed shipping option will likely be most viable for existing companies using Indiegogo's enterprise platform to test out new products.

45 comments

  1. Interesting but where does the money come from by SuperKendall · · Score: 4, Interesting

    While the idea I could see help to see some campaigns get more money, I wonder where this money would come from.

    There have been a number of examples of Kickstarter/Indiegogo projects where the money was all burnt through just trying to get something workable out - and failing. So in that case where all the money has been burnt, where are those refunds from? Is Indiegogo really going to be able to cover that?

    I still like Kickstarters system where they just get money above a certain amount, leading to a reasonable chance of success if they estimated well, and the collective mind evaluated the estimation well.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
    1. Re:Interesting but where does the money come from by Reaper9889 · · Score: 2

      One could do some insurance like scheme for this fairly easily. Thus, e.g. if projects fail with probability x, then for each dollar the campaign would put x dollars aside in case it fails. This way, you would, on average have enough money to cover it.

    2. Re:Interesting but where does the money come from by Anonymous Coward · · Score: 0

      If say 1/2 the projects fail, then the other half will have to subsidize the fails doubling the cost of the successful ones. If these projects can't get funding, they are probably not that likely to succeed. Who pays into one of these things without knowing it may come to naught. People are just stupid these days.

    3. Re:Interesting but where does the money come from by Anonymous Coward · · Score: 0

      That's why it's a 'select' program. The company is likely only going to offer the insurance to creators that have a good track record or redundant sources of finance.

    4. Re:Interesting but where does the money come from by Krishnoid · · Score: 1

      My first assumption would be an escrow account, where the money would not be released to the creator until something was shipped.

    5. Re:Interesting but where does the money come from by Anonymous Coward · · Score: 0

      Possibly, but probably also a bit of insurance and some sort of screening.

      The reality here is that the scams and general lack of investor protection are doing a great deal of damage to these sites. I personally won't back anything that is by somebody I'm not familiar with as these sites do very little to protect backers.

    6. Re:Interesting but where does the money come from by suutar · · Score: 1

      Yeah, if they can get any form of credit an escrow account should be very manageable if they actually have something functional and just need to ramp up production. If they don't have something functional, they probably won't qualify for this program.

    7. Re:Interesting but where does the money come from by Aighearach · · Score: 2

      That would turn it into a pre-sale scheme that would only be open to companies that don't actually need the help, and could just advertise their new product normally, and sell or pre-sell it normally.

      The whole point of crowdfunding, the part that makes it different than "shopping" is that the money is given in advance to fund the making of the product.

    8. Re:Interesting but where does the money come from by alvinrod · · Score: 1

      That seemingly punishes good actors more than bad actors though. The outright scammers don't give a damn when their campaign inevitably fails, since there was no intent to deliver anyways. Meanwhile, anyone legitimately trying to make something (whether they can or not is another matter) now really needs to raise even more to cover the insurance for everything that fails.

      I'd rather just take the risk that I get nothing if something doesn't work out, rather than have the cost to sponsor projects that I like balloon to cover other fools being parted from their money. Ideally people would learn after getting burned a few times and bad projects or outright scams would stop getting funded. Constantly bailing them out doesn't teach them anything and just means they're even more willing to chase bad ideas since there's no real consequence. It's like bailing out Wall Street. What do you think they really learned from that? It wasn't financial responsibility, it was that if you're declared "too big to fail" that you can do whatever the hell you want since the taxpayer will get stuck footing the bill.

    9. Re:Interesting but where does the money come from by SuperKendall · · Score: 1

      Even if they had something functional and ready to ramp up production I think it would be pretty hard to find lenders to take that risk.

      Even if you did, then you would be paying some kind of fairly large fee to bank against that escrow account, so now you need to factor in load fees on top of other (probably already unrealistic) production costs.

      Then there are the sticky edge cases, like what happens if they deliver a product but the end result kind of sucks and now a bunch of people are very unhappy. Does the company not get the escrow money even though they technically delivered?

      --
      "There is more worth loving than we have strength to love." - Brian Jay Stanley
    10. Re:Interesting but where does the money come from by AmiMoJo · · Score: 1

      Some lawyers will get very rich trying to determine if a product actually shipped and the insurance should pay out. What if the product that ships doesn't meet the promised spec? That's happened a lot.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    11. Re:Interesting but where does the money come from by ShanghaiBill · · Score: 1

      My first assumption would be an escrow account, where the money would not be released to the creator until something was shipped.

      The point of the funding is to pay for the development and manufacturing of the product. If they don't get the money till after the product ships, then that completely defeats the purpose.

    12. Re:Interesting but where does the money come from by DrXym · · Score: 1
      The bottomless hole that is human stupidity is doing a great deal of harm to these sites. It doesn't matter what dumb, useless or ultimately bullshit idea somebody has, there will always be idiots ready to back it. And not just back it for a % of the profits, no, they back it for a pathetic discount off the final product (assuming there is one) or some other meaningless gesture.

      And Indigogo and other crowdfund sites don't care. They get to skim the money flowing in and the money flowing out regardless of that happening.

      People with an ounce of sense in their heads would just wait for a tangible product to actually exist.

    13. Re:Interesting but where does the money come from by Anonymous Coward · · Score: 0

      If they could get any form of credit they wouldn't need indigogo.

    14. Re:Interesting but where does the money come from by AmiMoJo · · Score: 1

      The point of the funding is to pay for the development and manufacturing of the product. If they don't get the money till after the product ships, then that completely defeats the purpose.

      Guaranteed sales and proof of demand may generate other investment. Few successful projects are purely crowd funded.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    15. Re:Interesting but where does the money come from by coofercat · · Score: 1

      Most probably true.

      That said, if (say) I had a business idea and it was going to take £50K to get it into proper production because the minimum order was 1000 units, and when packed up they were 1m3 each, then I for one would feel very nervous about getting a loan on the house or whatever to get it started. I might get the loan, make the order and then have to stack those boxes in every last corner of my house and half a dozen friends houses for months until I sold them.

      However, if I knew I was going to sell 500 of them on day 1, and get some amount of my 50K back on that day, then I'd be:

      - highly motivated to get the development done and production order in as soon as my loan money arrived
      - be very adverse to any sort of production problem that delayed delivery, or compromised the output below the expectations I'd set

      I assume that also my bank would be more willing to lend me the 50K in the first place if they knew that I had pre-orders for (say) 40K of it before I'd even been walked in the door of the bank, and that I'd be able to pay them some or all of their money back on a particular date in the future.

      It's certainly a change from the regular 'crowd funding' methods we've seen to date, but it doesn't make it entirely useless to the (more serious) people trying to get something made.

    16. Re:Interesting but where does the money come from by Solandri · · Score: 1

      The person or company doing the Kickstarter/Indiegogo project doesn't get all the promised money. Kickstarter/Indiegogo take a percentage. Indiegogo is taking on the role of insurance company, and (based on their statistics for the success of past projects) are betting that they can pay for refunding failed projects out of their percentage cut, and still stay in the black.

      It's pretty risky because unlike (say) cars, the liability for any individual project can vary by a huge amount. One big failed project could end up costing them a lot more than their averages say they should've expected. But they're the ones with the years of built-up statistics, not me. So presumably they know what they're doing. They'll probably do a more thorough vetting of each project before letting it through to funding. Which quite frankly is something the industry badly needs since it's become apparent that the individual donors are not doing it, and are treating it like shopping at Amazon only with a delay of a few months between purchase and receipt of goods.

    17. Re:Interesting but where does the money come from by tlhIngan · · Score: 1

      The bottomless hole that is human stupidity is doing a great deal of harm to these sites. It doesn't matter what dumb, useless or ultimately bullshit idea somebody has, there will always be idiots ready to back it. And not just back it for a % of the profits, no, they back it for a pathetic discount off the final product (assuming there is one) or some other meaningless gesture.

      And Indigogo and other crowdfund sites don't care. They get to skim the money flowing in and the money flowing out regardless of that happening.

      People with an ounce of sense in their heads would just wait for a tangible product to actually exist.

      The problem is that many projects will never get the funding or loans required to take a prototype to production. Mass production of an item takes a lot of money.

      Even something as well established as printing a book often has minimum orders - you write a book and if you want to self-publish, the printers will generally want an immediate order of 500 copies (if they're a small printer) or more likely, a run of 5000 copies, which requires an immediate investment of up to $20,000 or so. Crowd funding helps get you that amount of money so you can publish your book - most authors wouldn't have $20K or more sitting around in a bank account to fund a print run. (And it can cost more if you want the nicer paper, or nicer ink, embossing, etc)

      So a lot of projects simply die after that stage because the next injection of cash is needed to take to production and they can't personally sponsor it.

      Investing for profits is also hard - at this point you're going to saddle the company or people with reporting requirements (per rules of the country they're in) which can be quite onerous and eat up tons of funds - it would make any crowdfunding under half a million dollars unfeasible if you have to hire auditors to audit your books every 3 months. Plus tons of rules and regulations ensure that you'll spend a chunk of that money on a compliance officer.

    18. Re:Interesting but where does the money come from by SuperKendall · · Score: 1

      I figured for a project to be able to earn this mark they would also be charged a higher percentage from IndieGogo, as you say so that IG can have enough of a pool to pay out failures.

      The risky aspect I see though, is that while they may have stats on failed projects the stats will not really matter much since the projects that apply for this special mark are essentially a random sub-selection of projects they have had before, so the failure rate will be pretty unknown.

      That combined with (as you said) the large variability of how much would have to be paid out, seems to make this pretty risky for IG. But I guess they know what they are doing...

      --
      "There is more worth loving than we have strength to love." - Brian Jay Stanley
    19. Re:Interesting but where does the money come from by Aighearach · · Score: 1

      I agree, it only 99% benefits large business, there is a small window for a small business to benefit too.

    20. Re:Interesting but where does the money come from by DrXym · · Score: 1
      The self publishing business model is to extract cash upfront from the author because they sure as hell won't make up for it in volume sales later. Yes there might be the odd professor, or guy selling some low volume quality book in amongst them, the exceptions that prove the rule, but it's background noise to their main audience - vanity publishers. This is reflected by simply perusing a site like lulu where 99% of it is garbage.

      But crowdfunding is similar to self publish they have a very low quality threshold. If your campaign looks superficially kosher they'll list it. Why? Because they rake 5% of the funds raised and most likely get kickbacks from their payment processors (who take another 3%) too. It's in their interests to allow as many campaigns to list as possible, regardless of them being economically viable, or outright scams or not. Campaigns just have to have the trappings of viability / not-scam and that's enough for them.

      I don't believe either that they serve a purpose that wasn't served by other forms of funding in the past - self funding, bank loans, investors. A good product, even one available in low volumes is either economically viable or it isn't. If it's viable, it will find funding. If it isn't and it ends up on crowdfunding then it throws into question its viability and the motivations / acumen of the people raising funds for it.

  2. Re:I hate /. bullies like ZIP & c6gunner... ap by Anonymous Coward · · Score: 0

    Mod parent down: Raving Fruitloop.

  3. Iâ(TM)m am GAYpk and ready to HOST by Anonymous Coward · · Score: 0

    My HOSTing

    big dicks my butt
    small dicks. My butt
    all dicks. My butt

  4. Zach Patterson / ZIP "Greatest Hits" (lol, not) by Anonymous Coward · · Score: 0

    See how STUPID "ZIP" (Zach Patterson) the CHIMP is (tried to take credit for what I solved before him) https://tech.slashdot.org/comm... (he needs to LEARN TO READ)!

    I even SHOW ways to do it YOURSELF https://tech.slashdot.org/comm... (he couldn't).

    Delphi/FreePascal/ObjectPascal HAS no issue w/ null-term'd string bufferoverflows - C does, C++ can UNLESS you do what I said 1st loser.

    Tell us about CODE SIGNING (which has been STOLEN & ABUSED) https://www.helpnetsecurity.co... MY METHOD CAN'T BE (upmodded +2 INTERESTING in CODING FOR DEFCON no less) https://it.slashdot.org/commen...

    "I'm a much better programmer than APK" - by Anonymous Coward ZIP on Monday October 08, 2018 @11:27PM (#57449082) FROM https://yro.slashdot.org/comme...

    BIG TALK - Yet ZIP has nothing to show in programs. I can https://news.slashdot.org/comm... from registered /.ers liking/using/praising my work (& 100k users worldwide too). He can't.

    LIAR ZIP says he has no account "I don't have an account, so I don't have mod points" https://news.slashdot.org/comm...

    Yet LIAR ZIP says he downmods my posts (IMPOSSIBLE MINUS AN ACCOUNT on /.): "I down-modded a few of your post on other threads" - by Anonymous Coward "ZIP" on Thursday October 11, 2018 @11:31AM (#57461058) FROM https://yro.slashdot.org/comme...

    APK

    P.S.=> KEEP IMPERSONATING ME CHIMP - this comes out every time, lol!... apk

  5. It's so UNFAIR that ZIP is BULLYING POOR me... apj by Anonymous Coward · · Score: 0

    See subject: I'm so sick & tired of /. BULLIES. You shitweasels have nothing better to do than HARASS, STALK & IMPERSONATE little ol' me. I've done absolutely NOTHING wrong & just try to make everyone's lives better w/ my work that stops ads & malware.

    * As soon as I post, I'm CENSORED to -1 w/ ABUSED downmodpoints by bullies like ZIP, who even admit to this. I caught c6gunner mocking then IMPERSONATING me when he forgot to log out. Zontar mailed me a postcard w/ THREATS on it, then LIES & STALKS me. All because you JEALOUS JOWIE "ne'er-do-wells" KNOW I'm World-Class & you're shit. It's why you hide behind FAKE names & UNIDENTIFIABLE ANONYMOUS.

    I'm even improving my already GREAT PHYSIQUE by getting calf implants while you weezils sit around all day on /. STALKING & HARASSING your BETTERS. I repeatedly dust the no-mind bullshit blatherings you BULLIES post to attack me. Like always I WIN & YOU LOSE.

    APK

    P.S.=> This BULLYING of me is SO UNFAIR & is probably a HATE CRIME because I'm gay. GROW UP... apk

  6. Zach Patterson / ZIP "Greatest Hits" (lol, not) by Anonymous Coward · · Score: 0

    See how STUPID "ZIP" (Zach Patterson) the CHIMP is (tried to take credit for what I solved before him) https://tech.slashdot.org/comm... (he needs to LEARN TO READ)!

    I even SHOW ways to do it YOURSELF https://tech.slashdot.org/comm... (he couldn't).

    Delphi/FreePascal/ObjectPascal HAS no issue w/ null-term'd string bufferoverflows - C does, C++ can UNLESS you do what I said 1st loser.

    Tell us about CODE SIGNING (which has been STOLEN & ABUSED) https://www.helpnetsecurity.co... MY METHOD CAN'T BE (upmodded +2 INTERESTING in CODING FOR DEFCON no less) https://it.slashdot.org/commen...

    "I'm a much better programmer than APK" - by Anonymous Coward ZIP on Monday October 08, 2018 @11:27PM (#57449082) FROM https://yro.slashdot.org/comme...

    BIG TALK - Yet ZIP has nothing to show in programs. I can https://news.slashdot.org/comm... from registered /.ers liking/using/praising my work (& 100k users worldwide too). He can't.

    LIAR ZIP says he has no account "I don't have an account, so I don't have mod points" https://news.slashdot.org/comm...

    Yet LIAR ZIP says he downmods my posts (IMPOSSIBLE MINUS AN ACCOUNT on /.): "I down-modded a few of your post on other threads" - by Anonymous Coward "ZIP" on Thursday October 11, 2018 @11:31AM (#57461058) FROM https://yro.slashdot.org/comme...

    APK

    P.S.=> KEEP IMPERSONATING ME CHIMP - this comes out every time, lol!... apk

  7. ZIP = "better programmer" (lol, not) by Anonymous Coward · · Score: 0

    You said it ZIP: So where's your work everyone can see/use? It's not. It's HOTAIRWARE/NOTWARE (lol) "I'm a much better programmer than APK" - by Anonymous Coward ZIP on Monday October 08, 2018 @11:27PM (#57449082) FROM https://yro.slashdot.org/comme... ?

    The BETTER PROGRAMMER w/ no programs, lol - @ least you can say your "code" has NO BUGS - of course, it also does ZERO (like you) since it does nothing @ all, lol!

    You hotair BLOWHARD talker, lol!

    You f'd up ZIP https://tech.slashdot.org/comm...

    Yet 100,000++ users of my ware & dozens of even REGISTERED /.ers like/use/praise MY work https://news.slashdot.org/comm... vs. your HOTAIR talk punk!

    * LMAO!

    (Let's see how YOU take it when I publicly SHIT ALL OVER YOU by letting FACTS of YOUR FUCKUPS vs. ME https://science.slashdot.org/c... do the job for me)

    APK

    P.S.=> You STUPID & LAZY all talk chimpanzee... apk

    1. Re: ZIP = "better programmer" (lol, not) by Anonymous Coward · · Score: 0

      Thank you. Please post this a few more times in this article.

    2. Re: ZIP = "better programmer" (lol, not) by Anonymous Coward · · Score: 0

      Indeed! It is funny seeing ZIP \ Zach squirm unable to back his blowhard mouth that bit off more than it could chew attacking apk.

  8. Thank you, APK by Anonymous Coward · · Score: 0

    Thank you. You're doing exactly what I want by spamming this in every article. That's my real goal. I support and encourage modding your posts to -1, but mostly because it encourages you to repost your previously modded posts. I'm also glad you can post with virtually no limits. That's exactly what I'm aiming for. That's an objective along the way to the end result I desire, and you're doing exactly as I want you to. You're just not smart enough to see what my plan is, because you're so blinded by your ridiculous hatred of many people on the internet.

    1. Re:Thank you, APK by Anonymous Coward · · Score: 0

      Don't talk programming when you have none. That was extremely stupid ZIP/Zach. You can't backup your bullshit. You impersonated apk for years! Much more the past month. You obviously don't like a dose of your own medicine used on you. Now you get what you paid for. Serves you right. Not fun taking medicine you yourself dished out. You dish it out but you can't take it and your reactions prove it. Makes us all laugh. Poetic Justice

    2. Re: Thank you, APK by Anonymous Coward · · Score: 0

      That is a whole lot of words to describe a guarantee, dontcha think?

  9. SHIP A BRICK by Anonymous Coward · · Score: 0

    Dumped by Trump when Meuller GETS HIS ASS BIGTIME! The rest of them, too, OF COURSE!

  10. Thank you again, APK by Anonymous Coward · · Score: 0

    LOL, you can't seem to decide whether you want to accuse ZIP or c6gunner of impersonating you. Make up your mind.

    You're doing exactly what I want you to do. Please continue spamming every article with your personal attacks. The more, the merrier!

    1. Re:Thank you again, APK by Anonymous Coward · · Score: 0

      He isn't using personal attacks. Just fact of you attacking him fucking up. Keep reacting. What's good for the goose is good for the gander and you're getting a dose of your own medicine. Made me laugh. Poetic justice. You sure dish it out but you can't take it.

    2. Re: Thank you again, APK by Anonymous Coward · · Score: 0

      Call it what you wish, APK. I just want you to keep posting it. I think you should post mote of your anti-ZIP comments in this story. Don't forget to sign them APK!

    3. Re: Thank you again, APK by Anonymous Coward · · Score: 0

      Keep dancing to APK's tune you provide lyrics for ('better programmer' my ass hahaha). You dish it out & can't take it. Keep reacting ZIP. It's hilarious!

  11. ZIP = "better programmer" (lol, not) by Anonymous Coward · · Score: 0

    You said it ZIP: So where's your work everyone can see/use? It's not. It's HOTAIRWARE/NOTWARE (lol) "I'm a much better programmer than APK" - by Anonymous Coward ZIP on Monday October 08, 2018 @11:27PM (#57449082) FROM https://yro.slashdot.org/comme... ?

    The BETTER PROGRAMMER w/ no programs, lol - @ least you can say your "code" has NO BUGS - of course, it also does ZERO (like you) since it does nothing @ all, lol!

    You hotair BLOWHARD talker, lol!

    You f'd up ZIP https://tech.slashdot.org/comm...

    Yet 100,000++ users of my ware & dozens of even REGISTERED /.ers like/use/praise MY work https://news.slashdot.org/comm... vs. your HOTAIR talk punk!

    * LMAO!

    (Let's see how YOU take it when I publicly SHIT ALL OVER YOU by letting FACTS of YOUR FUCKUPS vs. ME https://science.slashdot.org/c... do the job for me)

    APK

    P.S.=> You STUPID & LAZY all talk chimpanzee... apk

  12. IndieGoGo by ledow · · Score: 1

    They singularly failed to do anything, despite a lot of hot air, about the Retro Computers Limited scandal.

    £250k of investment, about 10 prototype units to show for it, and IndieGoGo promised / threatened lawsuits and all kinds and did literally NOTHING about it. They now just close queries from backers of it, and don't issue public statements on it.

    If you want to fix yourself, IGG, fix that campaign and go through with your promises. Or you should have shut up and said "You're on your own" to backers from the very start, and at least reply in that respect when they query.

    I've never used the platform, but I've used Kickstarter and a few others and they've always delivered and responded for me. I certainly wouldn't touch them now.

    The way to judge a company is not by products, prices, or anything else. The only thing that matters is how they deal with established or previous customers. IGG suck in that respect, despite making a lot of noise to the contrary they literally did nothing about someone walking off with £250k when they were threatening them with lawsuits if they didn't deliver. And the guy is still around, still active, still running other companies... it's not like he did a runner to Barbados, like some of the scam Kickstarter-esque things.

  13. Guaranteed without any guaranty? by kbg · · Score: 1

    "Per Indiegogo, in certain cases, some funds may be withheld from the creator until they can confirm that they will be able to ship their products on time"

    So how is that actually going to work? I mean if the funds are not withheld in all cases then obviously the money don't exists to refund. So where does that money come from? Will Indiegogo pay out of their own pocket? I seriously doubt that, so obviously the only conclusion that you can come to is that the "guaranteed shipping" is actullay not guaranteed.

  14. Indiegogo's motto by Anonymous Coward · · Score: 0
    "Because a sucker is born every minute."

    Seriously, if you "crowdfund" anything, but especially the half-formed ideas that represent the typical Indiegogo / Kickstarter campaign you are a fucking idiot with more money than sense. These services exist as a hookup service between hopeless entrepeneurs, scammers and gullible marks.

  15. "Some funds will be withheld 'til you ship" by Opportunist · · Score: 1

    In other words, as a scammer, you just have to ask for more money to compensate for the loss you have to cut.

    --
    We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    1. Re:"Some funds will be withheld 'til you ship" by Anonymous Coward · · Score: 0

      and if you aren't a scammer, and the money is withheld, you get all the hassle of crowdfunding with none of the benefits of crowdfunding.

      They say it's better for established companies but why wouldn't an established company just take preorders if they are guaranteeing delivery. Why would they go through all the extra bullshit and give a 1/5th of the gross (not profits) to indiegogo??