Normally, we wouldn’t cover an announcement that a product is now available for purchase online. However, the Rite Press is not a normal product with a normal product history. After the “no mess French Press” crowdfunded more than $1.3 million across Kickstarter and Indiegogo, the Rite Press wound up being a no-show for most backers.
Then in February, after months of delays, Sargam Patel, CEO of the Rite Company, asked people who already pledged to pitch in another $30 each in order to fulfill the thousands of outstanding, unfulfilled orders.
Which brings us to today’s announcement that as of now, anyone can buy a Rite Press directly through the company’s website.
Huh? How can the Rite Company open up sales of its Rite Press, when it still hasn’t fulfilled the pledges of its crowdfunders?
According to Patel, whom I chatted with by phone yesterday, the answer is that money from the direct sales of these new Rite Presses are the only way he can fund the fulfillment of the earlier backed ones.
As a quick refresher. We wrote a piece in February outlining some of the woes Rite Press encountered, including manufacturing issues in China. But the bigger issue was that the cost of goods was $1.8 million and Rite had raised only $1.3 million (Patel also put in $280,000 of his own money into the project). The result all this trouble was that only 7,000 of the more than 21,000 backers got their product.
Needless to say, backers were rightfully hacked about the whole situation.
Patel told me that if he could do it all over again, there are two things he would change. “One, I would have asked for a higher pledge amount.” Patel was losing $20 on each order which was compounded by “Two, I would have set a cap on the Kickstarter.” By getting an average pledge of just $45 and offering free shipping, the fact that he kept taking pledges with no cap just amplified the amount he was in the hole.
The new prices for the Rite Press are $100 for the 1 liter press and $80 for the half liter. Patel said that each new sale would fund the fulfillment of an original backer who did not pledge the extra $30 in February. But he needs to sell a ton of new units in order to meet the backlog. “If we don’t get a single order on our webs site,” Patel said, “then we don’t see ourselves shipping those [crowdfunded] units anytime soon.”
But original backers shouldn’t get too excited. They are still at the end of the queue. This gets a little complicated, but here’s the breakdown of who got a Rite Press, and the order of who will, according to Patel.
- The company shipped 6,000 units before any troubles
- “Several thousand” backers agreed to give the extra $30 in February, which gave them priority and took the number up to 8,600 units in the hands of people or in transit to their homes
- There are 300 units available in a warehouse right now. People who buy their Rite Press directly from the site as of now will get theirs right away
- Once those 300 units are sold, another 500 units will be re-ordered to sell on the website and an additional 300 units to ship to crowdfunders
- Patel is going back out to original backers again to see if they want to pledge $30 to get their units in a more timely fashion.
- All in all, 12,000 units need to be sold on the site, assuming no one else pledges more money, to fulfill all the original backers.
There is a plastic Essential Plus currently for sale on Amazon, which Patel laments is selling “slowly” because angry crowdfunders have “shit on the product” in the reviews, giving it just 1 star and calling out the company on never fulfilling its original orders.
All this news is probably infuriating to original backers, who are now stuck watching newcomers cut to the front of the line. Despite all this and continuing to live off his savings (he says he still isn’t drawing down a salary), Patel seems undaunted, if not optimistic.
“Amazon is selling 90,000 French Presses [total in the category] a month. Aeropress is selling btwn 6,000 – 7,000 units per month,” Patel says, “It’s reasonable for us to pick up traction on our web site.”
Whatever the case may be, it is reasonable for crowdfunders everywhere to be careful about what they back. Kickstarter and Indiegogo may have spawned a number of great products, but they’ve also enabled overly optimistic and perhaps naive entrepreneurs into thinking that they can pull off hardware innovation on the cheap. But as Cinder, iGulu, HOPii and Rite Press has shown again an again, consumer hardware at scale it tough. Caveat Emptor.