What is product crowdfunding? What are the differences between product crowdfunding and product group buying?

What is Product Crowdfunding?

Product crowdfunding refers to a crowdfunding method in which investors invest funds in fundraisers to develop a certain product (or service). When the product (or service) begins to be sold to the outside world or is ready for external sale, the fundraiser will provide the developed product (or service) to investors free of charge or at a price lower than the cost in accordance with the agreement.

What are the differences between product crowdfunding and product group buying?

1. Product crowdfunding is for products that have not yet been released. Supporters participate in the design of new products and put forward their own opinions on the performance or services of new products.

2. Group buying is for ready-made products, and consumers participate in order to purchase finished products.

3. Products purchased through crowdfunding are all new products that are first released. Group buying is different and is often mature mass-produced products.

4. Product crowdfunding is a pre-sale behavior before the product is produced, and payment is required first. However, group-purchased products are already completed and are a promotional behavior, and payment can be made upon delivery.

5. Group buying of goods utilizes economies of scale. It brings together similar demands of similar customers, utilizes the versatility of goods, and strives to take into account the needs of different customers with similar demands, allowing as many customers as possible to use these goods, thereby expanding the purchase scale of a certain commodity as much as possible and effectively reducing purchase costs.

6. Product crowdfunding is targeted to meet the special needs of potential customers, using the extensive connections of the Internet to concentrate the long tail of special needs and achieve a viable scale. Product crowdfunding proposes a new method of product planning and design that is completely different from traditional methods. In the design of new products, product crowdfunding first solicits customers' opinions and understands their needs. Only when the special needs of these customers are met, a certain amount of reservations are made and the reservation funds are received, will production be carried out.

Many companies use product crowdfunding as a means of promotion before their products (or services) are launched on the market. Their purpose is not to obtain funds but to promote their products through the crowdfunding platform and obtain the first batch of customers.

The above is the content about product crowdfunding in this issue. Please pay attention and we will continue to answer your questions~