Free Sunglasses: A Business Model I Don’t Understand

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?

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Comments

  1. webmaster@mysearchisover.com's Gravatar Comment by webmaster@mysearchisover.com on December 10th, 2005 at 12:30 pm

    It reminds me of those cereal box gimmicks when I was a kid.

  2. Brandon's Gravatar Comment by Brandon on December 10th, 2005 at 12:32 pm

    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.

  3. Shivering Timbers's Gravatar Comment by Shivering Timbers on December 10th, 2005 at 2:28 pm

    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.

  4. Rob's Gravatar Comment by Rob on December 10th, 2005 at 8:35 pm

    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.

  5. Nick's Gravatar Comment by Nick on December 11th, 2005 at 12:57 am

    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.

  6. Brian's Gravatar Comment by Brian on December 17th, 2005 at 7:36 am

    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.

  7. George's Gravatar Comment by George on April 15th, 2009 at 8:50 am

    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?

  8. Dr. Dave's Gravatar Comment by Dr. Dave on December 6th, 2009 at 5:20 pm

    Hello , well you are right on both counts. Cheap sunglasses are cheap to make and yes they are turning a profit on shipping. How about a little inside info.
    This scenario is the poster child of the saying you get what you pay for.
    I have been in the sunglass industry for over 10 years. Our stores at one point carried “rack” sunglasses but we were a premium sunglasses retailer so we got rid of them. Rack and “cheap” sunglasses are poorly made and can even be dangerous. They go through very little if any testing. Lenses are distorted and unsafe. Frames are cheap and are made with inferior plastics. They are traditionally made in China and mass produced. If I told you what we paid you would beleive me. Not to mention our vendor had to make money too so…
    Bottomline you vision is not worth risking on cheap/free/rack sunglasses.
    If you want to check out some fantastic product with full warranties (some even have lifetime warranties) go to http://www.sunglassgarage.com I can offer you a one time use coupon code for 20% off your order. Use code GRAVYTRAIN at check out. If you stop by thanks in advance if not take care of those peepers you only have 2.

    Best,

    Dr D

  9. Shotzie's Gravatar Comment by Shotzie on May 6th, 2010 at 8:52 pm

    ________________________________________\
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    ________________________________________________ \

    You just got slammed by an e-penis, bee-otches!

  10. Atlas's Gravatar Comment by Atlas on May 28th, 2010 at 11:38 pm

    It’s not only about the one time buy. Everything mentioned above is correct about cheap glasses and inflated shipping, but where they really get you is that you have to turn over your credit card information to them … which they then sign up for a recurring monthly fee in a “free sunglasses membership” if you will. If you’re not paying attention, they start dinging you every month for a membership you didn’t sign up for and send you sunglasses that you don’t want/wouldn’t have picked even if you did want new sunglasses (3 new sunglasses every month? Really?). I called my credit card company to start the appeal process, and their reply was “Oh, I recognize this company. Don’t worry, we get this complaint all the time, we don’t need anything from you, we’ll just put a stop to all future fees.” They do this often enough that even the credit card company is familiar with the scam … but here’s the catch: the credit card company won’t do anything unless the consumer (read, scam victim) notices something is up and makes the effort to call … something I’d bet 95% of the people don’t do. So they win the majority of the time, and when one brand “market study” runs out, they start a new one. BTW, Alterna is exists, but now there’s a new “company” called Red Star WorldWear. I bought a pair I still use (because it had metal frames, the plastic ones fall apart in a week) three years ago from a company I remember starting with a V as well.

  11. Jon's Gravatar Comment by Jon on June 22nd, 2010 at 1:30 pm

    This doesn’t surprise me. For one, sunglasses are very cheap to make. I had a family member who worked at Gargoyles, Inc. They make (or at least made) the Gargoyles, Hobie, Private Eyes, and other somewhat reputable sunglass brands. Their production line was mainly hispanic, though they did produce them here in WA state. They would wholesale off returns/factory seconds/etc. for about $5 a pair. My guess is this is probably still covered actual production costs. Imagine if the same company produced them in China where overhead would be much lower. They could still make a profit selling retail at $20. That being said, my experience with Chinese knock-off products hasn’t been that great. I would have a hard time expecting $200 sunglasses quality from a company using these types of tactics, but you never know. I guess if you’re confident in getting your money back, what’s the harm in checking them out? The glasses I get for this price locally are not much better than the $5 glasses, so as long as they actually deliver the product and it’s at least somewhat consistent with the ad, I’d give it a go.

  12. phil's Gravatar Comment by phil on September 23rd, 2010 at 5:59 pm

    Most of the big name, big money sunglasses are priced that way because consumers are suckers and advertising costs money. Paying 200 bucks for sunglasses seems ridiculous to me so I’ll pay 17 for a pair of sunglasses and if they suck or if I sit on them, or if I lose them, I won’t feel too bad since I didn’t pay 200 bucks.

  13. Elias E. Gonzalez's Gravatar Comment by Elias E. Gonzalez on October 19th, 2010 at 4:01 pm

    Hi . I saw the same Ad in a magazine so I decided to order them and then finally they arrived . The blue ones seem to be attractive so I got two one on black and the Blue. I thought of it as a legitimate Ad and it coincided with my lasik eye surgery I had a year ago so I said Why not? I had already bought some polarized sunglasses at the store due to the surgery which turned out to be perfect here in Houston Tx. So I opened the boxes and I tried them. They do not seem to be of bad quality really tough well it is for a market study anyway so what the hell.I really do not recommend these type of sunglasses for people who really need sun protection like me. I don’t use the Redstarworld wear brand but I really like the style. This doesn’t mean that you shouldn’t pay 200 bucks for polarized glasses . The ones I have work perfect and they cost me 219 dollars. GO to a store and try any type of glasses and judge for yourself but don’t pay 200 bucks trough the mail, you will regret it. I guess the study is that many people are willing to get free sunglasses than any other type of merchandise like toys , clothes , or electronics. Look at many Optic Clinics they all offer a free pair when you buy one. It is a lot cheaper to put an ad in a magazine and reach millions than go to each store to see if they can buy your idea. About their membership? Is easy these guys never bother me again like other retail stores so I never got any other offer for free sunglasses.

  14. rkrudolph's Gravatar Comment by rkrudolph on March 24th, 2011 at 1:27 am

    The glasses “RETAIL” for $100+ according to the site, realistically about $10-$40. They are obviously not Oakley or Rayban quality. This originally started as market research a few years back and has continued under many different names, recently Redstar. They do offer AWESOME styles. So grab a Playboy or Sports Illustrated to get the promo code, and take a look. I lose pricey high quality sunglasses all the time but somehow I hold on to cheap ones, so I love these deals. I have a 3 yr old pair!

    Bottom Line, if you want some stylish sunglasses that you don’t want to pay $250, then try these out. I think most people will be VERY pleasantly surprised.

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