What is Crowdfunding?

Crowdfunding has transformed how creators and merchants launch new products. Instead of investing thousands upfront and hoping customers will buy, crowdfunding lets you validate demand first—collecting pre-orders and funds before you manufacture.

For Shopify merchants, this model eliminates inventory risk while building a community of early supporters. The global crowdfunding market reached $17.2 billion in 2024, and continues to grow as more creators discover its power.

What is Crowdfunding?

Crowdfunding is a method of raising money by collecting small contributions from a large number of people, typically through an online platform. In ecommerce, this usually takes the form of pre-orders: customers pay upfront for a product that will be manufactured and delivered later.

The creator sets a funding goal (e.g., $10,000) and a campaign timeline (e.g., 30 days). If the goal is met, the product gets made. If not, backers are refunded.

This model has helped creators launch everything from innovative gadgets to limited-edition merchandise, all without traditional retail inventory risk. While platforms like Kickstarter pioneered the model, modern merchants increasingly run campaigns on their own Shopify stores to maintain customer relationships and avoid platform fees.

Types of Crowdfunding

Not all crowdfunding works the same way. Choosing the right model depends on your product, risk tolerance, and business goals.

All-or-Nothing (Threshold Funding)

Funds are only captured if you hit your goal. If you fall short, all backers are refunded automatically. This is the classic Kickstarter model.

Best for: Games, board games, products with high minimum order quantities (MOQs), first-time launches where you need to prove demand.

→ See games & entertainment examples

Flexible Funding (Keep What You Raise)

You keep whatever you raise, even if you don't hit your goal. More freedom, but you must fulfill orders regardless of quantity.

Best for: Services, digital products, projects where partial funding still works. Fundpop offers this option on your own Shopify store.

Pre-order Campaigns

Ongoing campaigns without a hard deadline. Customers commit to buy before you ship—similar to crowdfunding but without the urgency of a campaign end date.

Best for: Repeat launches, vinyl drops, seasonal products, ongoing limited editions.

→ See musicians & vinyl examples

Donation-Based

Backers give without expecting a product in return. Common for causes, community projects, and nonprofits.

Best for: Charities, community causes, creative projects seeking patron support.

Quick comparison:

• All-or-Nothing — Payment only if goal is met. Zero risk, high urgency. Used by Kickstarter, Indiegogo, and Fundpop.
• Flexible — Keep what you raise even if goal not met. Medium risk, high urgency. Available on Fundpop.
• Pre-orders — Deferred or immediate payment. Low risk, medium urgency. Best for repeat drops, vinyl, limited editions.
• Donation — Immediate payment, no product expected. No risk, low urgency. Best for nonprofits and causes.

Why Crowdfunding Matters for Your Business

For Shopify merchants, crowdfunding solves the chicken-and-egg problem of product launches. Traditionally, you'd invest in inventory, hope it sells, and deal with unsold stock if it doesn't. Crowdfunding flips this: you validate demand first, manufacture second.

Zero inventory risk, validated demand:

• Test demand before production — Use customer funds to cover manufacturing costs
• Proof of concept for investors, suppliers, or licensors
• Built-in audience excited to receive and share your product
• Valuable feedback before finalizing production

Why run on your own store vs. Kickstarter?

Our merchants consistently cite these advantages:

• Keep 100% of customer data — Every backer becomes a Shopify customer you can market to forever. On Kickstarter, you lose direct access.
• Lower platform fees — Fundpop charges 0.5-1% vs Kickstarter's 5% platform fee (both have separate payment processing)
• Full brand control — Your store, your design, your checkout experience
• Build customer LTV — Repeat purchases and ongoing relationships, not one-time backers
• Preserve existing traffic — Don't divert customers to external platforms

Julien-K·Electronic Rock Band

“We had years of successful crowdfunding experience on Indiegogo. We wanted to bring this capability in-house to our own store. Fundpop worked with us closely—campaign was a massive success!”

Ryan Shuck

Lead Vocalist, Julien-K

Indiegogo

Switched from

Vinyl & LPs

Products

Read full case study

According to industry data, pre-orders can reduce inventory risk by 60-80%.

Key Benefits of Crowdfunding

• Validate Before You Build — Test product ideas with real money commitments, not surveys or guesses. Real purchase intent tells you more than any market research.

• Fund Production Upfront — Collect payments before manufacturing to eliminate financial risk. Use customer funds to cover production costs.

• Build Community Early — Turn backers into brand advocates who spread the word and return for future launches. Early supporters become your most loyal customers.

• Create Urgency and Scarcity — Limited-time campaigns with funding goals drive immediate action. No more "I'll buy it later" window shopping.

• Keep Customer Data — Unlike Kickstarter, running campaigns with Fundpop means every backer is YOUR customer you can market to forever.

• Lower Platform Fees — Fundpop charges 0.5-1% platform fee vs Kickstarter's 5% or Indiegogo's 5%. Payment processing (~2.9%) is additional on all platforms.

Crowdfunding by Industry

Different industries use crowdfunding in different ways. Here's how real merchants apply these strategies:

Games & Entertainment

Games of all types—from family games to tabletop RPGs—require significant upfront investment in manufacturing. All-or-nothing campaigns let creators validate demand before committing, with automatic refunds if goals aren't met.

Key tactics: All-or-nothing funding, stretch goals for milestone rewards, strong pre-launch email lists.

→ See games & entertainment examples

Board Games & Tabletop

Board game retailers use Fundpop for group-buying hard-to-find games, aggregating orders to meet minimum quantities. Publishers fund new releases with all-or-nothing campaigns. BoardHouse (Italy) even created a dedicated "FundPop Campaigns" section on their store.

Key tactics: Group-buy model, branded campaign sections, local market focus (no international shipping fees for customers).

→ See board games examples

VTubers & Streamers

Digital creators run high-volume merchandise campaigns—plushies, apparel, accessories—without upfront inventory costs. Pre-order models let fans reserve items before production.

Key tactics: Pre-orders for each drop, stretch goals to unlock bonus items, Discord community engagement.

→ See VTuber & streamer examples

Food & Beverage

Food brands use crowdfunding for flavor validation—testing new products before committing to full production runs. Multiple simultaneous campaigns let you compare demand across variants.

Spiceology·Gourmet Spices

“Fundpop enables us to test out new flavor ideas, keep costs down, and deliver the flavor profiles people really want.”

Katie Capka

VP Marketing, Spiceology

1,429% funded

Best Campaign

18

Total Campaigns

Read full case study

Key tactics: Multiple concurrent campaigns, embed widgets in existing pages, compare demand across flavors/variants.

Musicians & Bands

Artists use crowdfunding for vinyl pressings, limited editions, and direct-to-fan releases. Many migrate from Indiegogo to run campaigns on their own stores—keeping customer relationships and higher margins.

Key tactics: Limited vinyl variants, signed editions, tiered rewards ($40 to $1,500), repeat campaigns for each release.

→ See musicians & bands examples

Publishers & Authors

Premium art books, special editions, and limited print runs are perfect for crowdfunding. High-ticket items ($150-500+) require brand-controlled experiences that marketplace platforms can't deliver.

Key tactics: Premium brand positioning, stretch goals for exclusive prints, all-or-nothing to create urgency, collector-tier rewards.

→ See publishers & authors examples

How to Get Started with Crowdfunding

Common Mistakes to Avoid

• Setting an Unrealistic Funding Goal — Goals that are too high create doubt; goals that are too low don't cover costs. Calculate your actual production needs and add a buffer for unexpected expenses.

• Launching Without an Audience — Cold launching to strangers rarely works. Most successful campaigns get 30%+ of funding from people who knew about the project before launch.

• Underestimating Production Timelines — Manufacturing takes longer than you think, especially for first-time creators. Talk to your suppliers about realistic timelines and add buffer time.

• Ignoring Post-Campaign Communication — Backers invest in you, not just your product. Radio silence after funding erodes trust and kills repeat business. Send regular updates—even when there's nothing new.

Crowdfunding vs Pre-orders vs Regular Sales

Not sure which approach is right for your product? Here's how crowdfunding compares to other sales models:

Crowdfunding:

• Payment timing: Goal-dependent or immediate
• Inventory risk: Zero (validated first)
• Campaign deadline: Yes (creates urgency)
• Funding goal: Yes (all-or-nothing)
• Community building: High (shared goals)
• Stretch goals: Yes
• Best for: New launches, validation

Pre-orders:

• Payment timing: Immediate or deferred
• Inventory risk: Low
• Campaign deadline: Optional
• Funding goal: Optional
• Community building: Medium
• Stretch goals: Sometimes
• Best for: Repeat drops, limited editions

Regular Sales:

• Payment timing: Immediate
• Inventory risk: High
• Campaign deadline: No
• Funding goal: No
• Community building: Low
• Stretch goals: No
• Best for: Proven products

When to use each:

• Crowdfunding — You're launching something new and need to validate demand before production. You want urgency and community engagement. Example: A game creator testing a new concept.

• Pre-orders — You're confident in demand but want to collect orders before manufacturing. Repeat launches where you've proven the concept. Example: A musician releasing limited vinyl variants.

• Regular sales — You have inventory on hand and proven demand. No need for validation—just sell. Example: Restocking a bestseller.

How Fundpop Helps with Crowdfunding

Fundpop brings crowdfunding directly to your Shopify store. Instead of sending customers to Kickstarter or Indiegogo—where you lose customer data and pay 5% platform fees—you run campaigns on your own storefront.

What our merchants say most:

• "Flexibility to run multiple campaigns at once" — Katie Capka, Spiceology (18 campaigns, 1,429% top result)
• "Campaign was a massive success!" — Ryan Shuck, Julien-K ($21K raised, 216% funded)
• "Very simple... feels like you never leave Shopify" — Lootbloc (68% success rate)

Key features:

• All-or-nothing or flexible funding models
• Real-time funding progress displays
• Countdown timers for campaign urgency
• Stretch goals & milestone rewards
• Deferred or immediate payment capture
• Native Shopify checkout integration
• From 0.5% Fundpop fee (vs 5% Kickstarter platform fee)
• Full customer data ownership for remarketing & LTV

Every backer becomes a Shopify customer you can market to forever. Every order flows through your existing checkout, shipping, and fulfillment setup.