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Free, Just pay shipping business model ?

by Ali Zgheib
9 replies
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Hello, last 2 days i came over the topic of selling products for free and the customers just have to pay of the shipping fees( they make the shipping cost higher to be able to make profile )
like products price is 0$ and the shipping price is like 8$ maybe which will be their profit i really liked the idea and with ads on fb it get alot of attention and serious buyers. im just curious to know can this be done on more expensive products such as items price btw 10-50$ since the price will be more expensive then the shipping fees for sure.
#business #free #model #pay #shipping
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  • Profile picture of the author dave_hermansen
    I'm definitely confused by this question. You are asking if you can use the free shipping model on products that have a price of $20-$50? If they have a price, they are not free.

    Or, are you asking if you can say the product is free but shipping is $50? I suppose you can do that if you are selling something that is quite big and/or heavy but I think you'll lose 95% of the people on your checkout page even then.

    The free shipping model is not something that is used to actually turn a profit. More often than not, the cost of advertising exceeds what you take in. The model is primarily used for list building, where you will then email those customers and try to sell them something else later.
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    • Profile picture of the author JasonTheFreeman
      I see, so this is what the purpose of free shipping is. I thought it was just an act of generosity.
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  • Profile picture of the author BradKasten
    Dave is correct. The free plus shipping is like a lead magnet to get a customer to your site where you can add them to your list and try and upsell them with more products. Generally, you are drop shipping inexpensive items from Aliexpress and the shipping cost pays for the cost of the item and if you're lucky the ad spend.

    This can still be an effective strategy but your margins are razor thin and you have to have a really good store set up with great products to upsell your customers, a good retargeting strategy in place, and above all a decent ad budget an ad strategy.
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  • Profile picture of the author Prakash Dayani
    This is possible only under 2 circumstances. 1. The company is fraud or 2. The company is burning angle investors money to attract customers. Understand that they will never get products for free . They will sell it for free bearing the cost in their marketing budgets and ultimately will not be able to break even ever in their life.
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  • Profile picture of the author AlexPam
    A free product...hmm? It's always a synonym of poor quality for me. Why not to make $25 for product and $25 for shipping?
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  • Profile picture of the author DIABL0
    I've promoted weight loss supplements which had $50+ market value and were a free trial + S/H.

    However, this is because they have huge markups and can cover the cost + shipping is covered by the total S/H.

    Typically the payouts are $30-$40 because the buyer is put on continuity program and the advertisers know their numbers, so they still turn a profit.

    The above has worked for me, but you really want to promote what is hot...what is Dr Oz talking about.

    All the other stuff you see online like the Shopify stores is mainly stuff from China that is very cheap and turns a profit depending on ad costs.

    Other may be doing it as a lead gen and know their numbers and even at a small upfront loss, they will make money from their back-end.
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  • Profile picture of the author laurencewins
    The word FREE means there's no cost. I personally hate seeing ads for products that claim they're free and then you get to the checkout and find there's a postage cost, regardless of the amount.

    Make up your mind and be transparent. Make legitimate sales by not claiming products are free when there's a catch.
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    • Profile picture of the author dave_hermansen
      Originally Posted by laurencewins View Post

      The word FREE means there's no cost. I personally hate seeing ads for products that claim they're free and then you get to the checkout and find there's a postage cost, regardless of the amount.

      Make up your mind and be transparent. Make legitimate sales by not claiming products are free when there's a catch.
      I agree. It is like the many infomercials you see on TV that tell you "act now, and get a second one free - just pay an additional charge". What does that even mean?!!!

      This model worked extremely well a couple years ago but consumers finally found their brains. It can still be successful with recurring billing products or as a means of list building or if you have a highly converting upsell but it isn't the profit model it was a short time ago.
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  • Profile picture of the author provenbusinessmodels
    I think this business model sometimes works and other times doesn't.
    You know by doing and when it works you just scale it up.
    I love selling products where the traffic is meaning on marketplaces like eBay, Amazon...
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