Crowdfunding Fees Explained: Percentage, Subscription and Per-Sale Models

The three ways rewards platforms charge creators, a $10,000 worked example and the costs people forget, like card processing and shipping.

Most rewards platforms take a percentage of the money collected, and card processing is added on top, at a standard US rate of about 2.9% plus 30 cents per payment. Some charge a monthly subscription instead. On Fraction Kings it is free to launch, the fee is 5.44% only on money you collect plus card processing, and there are no monthly fees.

The Three Fee Models

Model How it works Good when Watch out for. Percentage of money collected A share of each sale You want no cost until you sell The rate, and whether it applies to tax and shipping. Monthly subscription A flat monthly charge You sell steadily every month Paying in months you sell nothing. Per-sale flat fee A fixed amount per order Your orders are large Small orders become expensive.

A $10,000 Worked Example on Fraction Kings

100 supporters each pay $100, for $10,000 collected.

• Fraction Kings fee, 5.44%: $544
• Card processing, about 2.9% plus 30 cents per payment: about $320
• You keep: about $9,136

Launching costs nothing, and there are no monthly fees. 10% of the platform fee goes to a cause.

The Costs People Forget

• Card processing: charged on every payment on almost every platform, so always ask whether a quoted fee includes it.
• Making and shipping rewards: merch, prints and packaging cost money. With print on demand, the cost of each piece comes out of each sale, so nothing is paid up front.
• Sales tax: collected from supporters and passed on. On Fraction Kings, the fee is never charged on sales tax.

How to Compare Platforms Fairly

Work out what you keep from the same amount, for example $10,000 from 100 supporters, including card processing and any monthly fees for the months you will be live.

See the full breakdown: Fees for Creators.