Crowdfunding is a method of raising capital for a project or venture by raising money from a large number of people typically via the internet. It is also a form of crowd-sourcing. And one of the advantages of crowdfunding is that you will not only generate capital for your project, but at the same time, it will be easier for you and your supporters to share and spread the word about your venture. Making it faster to advertise what your product is all about.
Following are the different types of crowdfunding. Each has different benefits for entrepreneurs and investors.
1. Reward Crowdfunding – reward-based crowdfunding is the most common model. It allows the investors to participate in developing the business and receive a gift or the developed product in return instead.
2. Debt crowdfunding – this method provides the opportunity for the investors to fund the project in exchange for a financial interest on the investment that they have made.
Furthermore, this may provide you with an option of borrowing at a lower cost than that offered by applying for a loan through a bank.
3. Equity crowdfunding - This type of crowdfunding could work best for growth-focused companies in areas where there is potential for return. As this will allow investors to own a share of the proponent’s venture without gaining control over the enterprise. However, will receive shares of the profit in the form of company dividends instead.
4. Donation crowdfunding – a form of a campaign that is typically designed for charities, or those who raise money for social or charitable projects.
Once the campaign has been launched and the project has been funded. The next step would be sending out the rewards you had promised, you will need your gift or products to reach your investors and as crowdfunding involves a large number of people it will be a little difficult if shipping is done by an individual. The best option would be outsourcing to a Third-party Logistics or best known as 3PL. 3PL providers will do the tedious shipping process for you.
AFL Logistics Ltd. offers crowdfunding fulfilment services. AFL is armed with an up-to-date warehouse management system in order to provide you a real-time inventory, Pick & Pack and delivery management to ensure your gifts could reach your backers safe and efficiently.
Also, in order to ensure First In First Out (FIFO), accuracy and efficiency, we are applying barcode & RFID on all our internal processes (inbound, outbound, packing and cycle count). Furthermore, to keep track of your inventory and order, you may process the EDI through our systems internal portal anytime, anywhere.