Even very successful crowdfunding campaigns are under a financial crunch. This is especially true for campaigns that are started by companies and inventors with no previous funding. And since crowdfunding generally results in just preorders, all the money goes to setup and fulfillment. There is no profit and very tight budget constraints. The production of hardware is especially vicious, because of unforeseen problems with suppliers and design, that aren't identified during prototyping.
We are going to focus on hardware in this discussion. If a Kickstarter is making a physical product, a drone, or a gadget, they will undoubtedly have a plastic part or two comprising it. To make these plastic parts traditionally injection molding has been required. This means that molds have to be made.
Let's take a look at the LittleArm 2C. A very successful campaign that Slant 3D manufactured the parts for.
The LittleArm 2C has 7 individual plastic parts that had to be manufactured. Even if the molds were made in China the average cost would be $2000 per part.(the lowest being $700 and the highest being $5000). The crowfunding campaign raised approximately $17,500. So even before anything could be made, packed, or shipped, the team around the Littlearm would need to spend about $14,000 just to get the molds made. And each mold had to be perfect on the first try (which rarely happens).
Basically all of the campaign funded would go to tooling. But there would still be labor and design time for optimizing the kit. There was still packaging and shipping. And there was still all of the inventory of components needed to create the kit chipsets, servos, etc.
But the LittleArm Team did not use injection molding. They designed the the Littlearm to be 3D printed. So instead of using all of the campaign funds for tooling upfront, they were able to work on a per part cost basis. It resulted in the set of LittleArm plastic parts costing 3-6 dollars apiece. While this is a bit more expensive than injection molded pieces, the LittleArm Team was able to fulfill the Kickstarter with the funds available as they searched out retail partners to build on their success.
The use of 3D printing also allowed the LittleArm Team to develop the kit during production, and quickly update the design as customers found minor flaws that weren't identified during design. This flexible manufacturing ensured that most inventory was not outmoded on the shelf.
With that initial 3D printing pricing the Littlearm team were able to manufacture a 3500 Littlearm Kits before they even reached the upfront cost the molds they could have used. The Kickstarter required less than 300 kits be manufactured. So the Littlearm team was able to do what so few Kickstarters can boast of, turn a profit.
3D printing makes crowdfunding campaigns more than just a market validation. It allows hardware to be created in the low volumes needed to address the preorders, without using all of the campaign funds just to get started. It saves the startup money until it hits much broader mainstream success.
But 3D printing has become affordable enough now that "graduation" to injection molds is never necessary. The LittleArm and its sister kits are still manufactured by Slant 3D, and it can be purchased though most major online retail channels.
3D printing is not just an option for crowdfunding campaigns. It should be the obvious choice, to manufacture the first units of your product.