Two years ago I received an insert with my Runner's World magazine about free sunglasses. The company claimed that they were new and were trying to build brand recognition by giving some initial sunglasses away for free. I could pick up to four pair and only pay shipping an handling. I found three that I liked, and the total S&H was about $20. Two the three pair broke within a few weeks, but I still have one pair that I wear sometimes.
Fast forward to today. I get a flier in the mail from ActivaBrands (which wasn't the name of the original company. I remember it started with a V). The flier looks pretty much like the ad from two years ago, and it's the same deal. Weird. So I begin to wonder… Is this just a coincidence? Is this a competitor doing the same thing? Is this the same company re-branding itself? Are these Sunglasses just a few cents to make, such that the "shipping" fee actually turns a profit?
I open up a web browser and search for free sunglasses and I find lots of sites offering them. Why? What am I missing about this business model? Some of these sites claim that they have overstock sunglasses that they would rather give away than pay to destroy. But I keep thinking that if I was a sunglass manufacturer, and year after year I was overproducing sunglasses that I had to give away for free, I would cut back on production.
My best guess is that either:
1. Sunglasses really are dirt cheap to make.
or
2. Once you get your free sunglasses you get a bunch of other junk mail.
Does anyone see something I'm missing, or know anything about this strange business model?
It reminds me of those cereal box gimmicks when I was a kid.
The sunglasses are very cheap. At the mall the other day, my wife purchases a pair of sunglasses for $7.00 at a retail kiosk — that was the price on every pair of glasses on the kiosk. If they can make $7.00 glasses work in a mall, they can definitely make it work mail order.
You answered your own question when you said you paid $20 for shipping. The sunglasses are “free” except that you need to pay $20 for three pairs.
They’re pRobably making at least a 75% profit. I’ve seen racks of sunglasses for $3 each at retail, which means that wholesale they pRobably only cost a buck or so. But since you’re also familiar with expensive brands which cost $75 or more per pair, you don’t realize that you’re getting the cheap novelty glasses and not expensive Ray-Bans.
The only thing is that if they just say “free sunglasses for $20 shipping,” your scam radar will start going off, and you’ll realize that you’re paying over $6 for $3 sunglasses. So they make up some BS story about how they’re trying to build brand awareness, or they’ve got overstock, or there’s $20 billion in a bank in the Congo (wait, wrong scam….). The story is just to distract you from the fact that you’re paying more in shipping than you would pay for the merchandise at the local drugstore.
ST,
Yeah, but the hard thing is that they look really cool in the brochure. And of course, when you get them and can tell they are cheap, you think “so what? they were free.” I guess this gets around truth-in advertising laws.
Hi Rob,
This business model seems to be rife in eBay aswell. I was searching for a Pedometre the other month and what i found was something interesting. All the edometre were either free or worth pennies (im in the UK)
the onnly thing that cost anything was the £5 shipping fee! I guess it’s quite a good ploy because some people fundamentlayy think that they are getting a bargain becasue the actual product is free. What they don’t realise is the shipping cost is pRobably 200% more than the production cost of the product! The pedometre was made in china, so you can imagine they must churn out hundreds of them a day.
As for why people charge high shipping on ebay, the reason is ebays payment model, which is based on the final bid price, but not the shipping. Therefore it makes good economic sense to start the bidding low to attract more initial bids, and ensure a reasonable margin by inflating postage.
As for the sunglasses model, it seems reasonable that a mail-order firm could sell them really cheap and ensure a reasonable margin through shipping&handling.
Another revenue stream could be your personal info , since by responding to their offer you have pre-qualified yourself, and are therefore a potentially valuable customer to other firms and catalogs.
Yeah, well, my son just bought a pair for his birthday and my bank just called and they’ve scammed my credit card for close to $500 bucks. How’s that for cheap sunglasses?