I'm not judging one way or the other because I have no dog in this fight. I can however, provide information regarding Kickstarter that you can interpret however you see fit. This is going to be a wall of text, but bear with me.

My wife and I recently ran a successful Kickstarter campaign related to her passion: knitting. We produced a variety of products aimed at the knitting community including posters, shirts, tote bags and buttons.

It was our first attempt at a Kickstarter campaign and we had only a slight idea of what we were in for. We set a very low funding goal of $900. We wanted to have a goal that was reasonable to achieve, that way even if we only sold a few things, she would still get to see people wearing stuff we made at the various knitting shows and retreats.

Fortunately for us, we blasted past our goal and our campaign ended at an astounding $12,400 in funding.

We were also a Staff Picked campaign. We never really got any information regarding how or why it happened. As far as we have been able to determine, it seems that campaigns that have a reasonable chance of being successful and profitable get flagged for Staff Picks. Being a Staff Picked campaign moves you up on the ladder whenever someone searches for any terms related to your tags or within your category. Keep in mind, that "successfully funded" and "project completed and delivered" are not the same thing.

As long as it isn't hurting their bottom line, Kickstarter does not care if your project is completed or not. The responsibility of completing a project and delivering it to the consumer falls squarely on the shoulders of the creator. Once the campaign is funded, Kickstarter gets their cut and they are more or less out of the picture.

They make it very clear that the creator is legally obligated to deliver the goods if funding is successful. What they don't make as clear is that they have no obligation to facilitate the refund.

Kickstarter is very much based on trust and transparency. Unfortunately some campaign creators out there break that trust. Not only does that hurt their supporters financially, but it also hurts the thousands of honest creators out there. I'm sure there are plenty of other people out there who would have funded our campaign, but had reservations because of bad experiences with other projects.

To give a solid example of how important trust and transparency are and how they go hand-in-hand, you can look at our tote-bag fiasco. (Fiasco is probably too strong a word.) When we took delivery on our tote bags, we realized that they were of a much lower quality than advertised. Rather than spin a tale of lament, we got out in front of it immediately. We called the manufacturer and adamantly voiced our concerns. We agreed to ordering an entirely new run of much higher quality bags at a 30% discount. We then sent out a message to every backer, it explained the situation and informed them that their bags will be different than pictured, but of much higher quality. Thankfully, only one person requested a refund (which we handled immediately) and we received a handful of emails supporting our actions and praising our honesty.

We now sell the remaining "bad stock" on our shop. We were fortunate that the "fiasco" ended up benefiting us financially.

_{Post edited by MattG: Didn't want to sound prechy and self serving!}

The other important topic to touch on is fees, as i saw a few people discussing them earlier in the thread.

Once the project is funded, it takes a few weeks for Amazon to process the payments. During this time you will see your funding total go down as some credit cards are rejected / people don't have enough money in their debit/paypal accounts / etc. It sucks, but sometimes people bite off more than they can chew.

After the payments are processed, Amazon will deposit the money into your online Amazon account sans fees. Kickstarter takes a 5% cut of all funding. Amazon takes another 5% for "credit card processing fees." Both fees are applied to the full amount of funding you actually received. That is to say, if your final funding number was $100, Amazon takes $5 and Kickstarter takes $5.

So out of a hundred bucks, you would be down to $90. No big deal, you still end up with most of the cash, right?

Wrong.

Don't forget Uncle Sam! It doesn't matter if you call it a donation. If you provide a service or product in exchange for money, the government wants a healthy cut. Let's be generous and say that your accountant is creative and you only need to pay 10% on the money you brought in.

You're down to $81 out of your original $100. Not great, but still not too terrible.

One surprising cost we did not foresee was shipping complications. We made it clear that international funders would need to add additional funding to pay for shipping. Unfortunately, we had quite a few folks who were overseas military. Their mail-to address was technically on US soil, but since it was heading across the ocean, we still had to pay the full shipping cost. It was a confusing and expensive lesson learned.

Now you just have to MAKE and SHIP the stuff you promised. Are you doing it yourself? You'll keep a lot of the profits, but spend a lot of time shlepping stuff back and forth to the post office. You could always use fulfillment, but that will take a sizable chunk out of your profits. Did your funding include a cushion to take any potential roadblocks or hiccups along the way into account? How are you going to handle customer service and refunds if it becomes necessary? What do you do if one of your suppliers or team members turn out to be unreliable? The possibilities are endless.

Like I said, I'm just trying to get some info out there to clarify how things work on Kickstarter. At the end of the day it comes down to trust, honesty and your gut. Is the creator trustworthy? Does the funding goal match up with what the production will actually cost? Does it seem "too good to be true"? If you back a project, you can then leave a comment on their page. Don't be afraid to ask questions. If they don't answer them clearly, just back out as a funder.

That's it for me. Here's a link to our funded project if you are interested: https://www.kickstarter.com/projects/guslerdesign/knitprints