How To Give Your Product Away For Free And Still
Make A Fortune!
by Lesley Anne Lowe.
What is the secret of business success? You may think it is to sell your product at the
highest price to the most people. Think again - you can actually make more money by giving
your product away!
This is a technique that reveals the secret of practically every business. It relies on
repeat sales, built up from the initial purchase of the product. The problem of generating
the initial purchase is overcome if the product is free, so eventually you should be left
with legions of loyal customers and you can hardly fail to make a fortune.
Before we explain this in more detail, take the example of Coca-Cola - a company whose
business has been based on the success of basically one drink. How far would the company
have grown if they had sold a can to everyone in the world...but nobody had ever bought
The success of the business depends on gaining a customer, providing them with a
product they are satisfied with, and then reaping the benefits of repeat sales.
So what does this mean to you? Whatever business you are in it is likely that it
actually costs you money to gain a customer. There may well be no profit in the initial
sale, which will be swallowed up in marketing costs, whether advertising, direct mail,
telesales, personal representation, or whatever.
The fact is that this initial sale is crucial, in order to make subsequent sales which
make a profit. Or is it?
Giving your product away, in the context of the above, seems to make sense.
Here is an example. Assume that you produce and market a food supplement which sells by
mail for $10. Your product cost is $1.50, and postage and packing another $0.50. The gross
profit margin is quite high, although this will be eroded by advertising costs when trying
to attract the new customers. It would cost between $10 and $20 to attract the new
customer, which you would hope to make back when people re-order the product.
Here's an alternative - offer the product free of charge. The cost to you including
postage and packing is $2.00....much less than it would cost to make a 'sale'. Also, the
take up rate will be far higher. You will have a massive database of people who have now
sampled your product, and hopefully benefited from it.
You may have spotted a flaw in this argument. What about advertising costs? You still
have to inform potential customers that they can have a sample for free. Well, yes you do,
but you don't necessarily have to pay for it. Get others to do it for free.
Here is just one way of doing it. A recent copy of a national Sunday newspaper carried
an article about a young man who had built his video tape business to a turnover in excess
of $3 million using this method. One of the main methods he had used to achieve this was
giving away his product free.
For example, a series of his products was aimed at anglers. He contacted one of the
major angling magazines and told them that he had several thousand videos to give away to
its readers. They were naturally delighted, because being able to make such an offer helps
to sell magazines. The magazine featured the offer heavily and it was a tremendous
Although the initial result was a cost incurred, the entrepreneur was able to enclose
literature promoting associated videos with the free one. This resulted in many thousands
of pounds worth of sales.
You will probably be able to think of many potential uses and spin-offs from this
technique. It can be adapted to many different products and markets. Perhaps you have
something to sell, which could benefit from this approach.
But don't forget: the next time you're pondering over how to sell more of your product,
consider giving it away instead. It's a lot easier and it could definitely be more
profitable in the long run.
Lesley Anne Lowe is publisher of Advance News, a free email newsletter geared towards
reseller marketing strategies and online business promotion. If you're interested in
learning from entrepreneurs who are actually making a living on the Internet, then this
newsletter is for you.
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