How Crowdfunding Affects E-Commerce - How Crowdfunding Affects E-Commerce

How Crowdfunding Affects E-Commerce

The buzz around crowdfunding is definitely on the upswing.

By now, you’ve likely already seen crowdfunding used in a great many ways to back a great many projects. Indie artists using it to fund their newest albums and creative ventures. Video game developers sourcing crowdfunds to create their niche masterworks.

Even individuals using crowdfunding to inject capital into their personal projects, world trips, and other ventures. It has without a doubt changed the landscape in many facets of life, but how has crowd-based strategic fundraising affected e-commerce?

How Do Ecommerce And Crowdfunding Merge?

A great many companies have had success with using crowdfunding to power their ideas, and with the case of e-commerce, there’s a common thread that clever observers have spied between each of them—they had a great idea or product they could market to the masses and sell online.

You can see how this successful strategy played out with the makers of Pebble Watches, The Sky Bell, and Goldie Blox. Just how did crowdfunding allow them to get ahead when other approaches had failed? Though the individual cases vary, there are few shared themes that benefit all potential e-commerce mavericks.

It Levels The Playing Field

Traditionally, getting funds to back an idea is tough. When you’re an unknown element with no connections, the process is even tougher.

The barrier to entry is stiff, but with the use of crowdfunding, those with a great idea can present it to the masses and let it rise or fall on its merits alone, not because of who they do (or don’t) know in the business.

You Can Pitch An Idea Without Having The Finished Product

This allows e-commerce companies to show that they’re onto something, even if that something isn’t quite ready yet.

If the idea is sound and the pitch is smooth, you can bring in the money you need to keep things rolling, saving you time and allowing you to continue working hard to bring your idea to fruition. - Crowdfunding E-Commerce, How Has It Played Out?

So, How Has It Played Out?

These concepts were partly in play with Pebble, whose founders couldn’t raise enough money through traditional seed funding source Y Combinator, and turned to a crowdfunding campaign to revitalize their vision. After raising a record amount of cash to keep themselves afloat, they were able to turn things around and get the dream off the ground, for a time at least.

Some might point to the fact that Pebble had to discontinue operations as a black mark on the idea of crowdfunding an e-commerce venture, but that myopic view disregards the fact that running a business is tough, and ignores the fact that they would never have reached a point where they shipped more than 2 million watches without turning to the crowdfunding community.

On top of that, it provided proof that crowdfunding could work, which has been replicated by several other ventures that are still alive and kicking, like the aforementioned Goldie Blox and Sky Bell.

The bottom line is that like all business ventures, developing an ecommerce company is fraught with risk, but crowdfunding can help propel you to heights previously unimaginable were you to go with traditional means.

It’s become so entrenched in the business, that even big-name e-commerce web builders like Shopify have guides on how to do it right so that your e-commerce dreams have a better chance of becoming a reality, and smaller ventures are using these resources, along with time management applications like Clockspot to keep themselves on task in building their companies’ futures.

Author Bio

Wendy Dessler

Wendy is a super-connector with and who helps businesses find their audience online through outreach, partnerships, and networking. She frequently writes about the latest advancements in digital marketing and focuses her efforts on developing customized blogger outreach plans depending on the industry and competition.

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