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Tuesday, May 20, 2008

In This Issue

Through the Editor’s Window
Feature

Do Freebies Devalue A Product Or Add Value To A Product?

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Through the Editor’s Window

Hi regular readers, welcome new readers,

Happy Tuesday! I was out celebrating Wesak Day yesterday so maybe that’s why this week seems like it just started.

I had a great morning at the temple praying, eating, lighting oil lamps and making my small donation to the Sichuan Relief Fund for the victims of the recent earthquakes in China.

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Don’t forget to also check out G3 News & Views for new updates on business insights, opportunities and making money.

Thank you so much for staying with us. I hope you find this issue useful in your business. See you next week !

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Feature

Do Freebies Devalue A Product Or Add Value To A Product?

by Happy Riches

Some people believe there is no advantage in giving free gifts to people Their reasoning is that this devalues the product you are trying to sell, because giving a free gift suggests that the product may not be able to sell on its own merits.

A free gift might be given as an enticement for people to buy your product but most people know that the cost of the freebie has to be factored into the price of their purchase. This suggests that the product being sold could really have been sold much cheaper if it wasn't for the gift. Or, it simply means that the product being sold is hugely inflated in price.

The hardest thing to put a price on is knowledge and experience. But if a person claims they are worth $1000 an hour, or can pull $10,000 a day in fees, there would have to be a corresponding value to warrant such a fee.

Maybe if you were about to lose $100,000 in a law court, you would not begrudge a high-powered lawyer 10 per cent if he were to win. Or maybe you are about to put together a deal which you otherwise could not have done without a particular intermediary; you will gladly give him $10,000 as an agreed fee, if it is worth your while.

When it comes to getting people to purchase your products, there is a view that the more attractive you make the deal, the more likely you are to get the sale without lowering the price.

For instance, you might decide that you need to make a certain amount of profit each day from the sale of your goods, so instead of trying to sell one item, you put together a package deal. The package deal gives you the profit you want, whereas selling the individual items would not have resulted in a sale.

If what you are offering still seems insufficient value for people to buy, you add value to the package deal by offering some additional free gifts. To really add value, the gifts need to be supportive of the other products or similar in some respect.

Although, you could give away a car if you are selling helicopters. This just might appeal to somebody who is in the market for a helicopter, providing that there is a cost saving involved. And many businesses sell all sorts of products with give-away mobile phones and other popular items because of the demand for the freebies.

When it comes to Internet marketing, giving away freebies takes on a different meaning. So many people are giving away ebooks. Much of the information is so freely available that it is only the unsuspecting newbie who thinks it is valuable.

It is because of this, the argument is that the newbie should pay for the knowledge rather than get it for nothing. The knowledge contained in ebooks is worth money because it is of value to the newbie. What the newbie is prepared to pay for the ebook is another matter. Without the ebook, the newbie remains ignorant, but if he can get it free, he will not pay.

But like all things, the market will dictate the price. If there is a lot of product in the marketplace, then people will undercut each other to make a sale. Eventually the market becomes saturated and what was once scarce is now commonplace and devalued. Instead of being sold, it is given away.

When it comes to Internet marketing, even though there is plenty of free information available, there is value in providing knowledge that is going to save people time. People are prepared to pay for this. There is also value in providing people with free products, because this attracts people to your website.

What becomes apparent is that while freebies might devalue a product, they can also add value if they are going to save people time from having to shop around.

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About the author:

Happy Riches knows how to show you how. Happy Riches also runs an educational membership club which has a focus on people becoming healthy, wealthy and wise. Happy Riches can be found at http://www.happyriches.name and sell products at http://www.happyriches.net

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