(Get Yourself a Pair of) Cheap Sunglasses
Two things are interesting about Business Pundit's recent post on those ubiquitous, full-page, free sunglasses magazine inserts. The first is that its as rare as it is refreshing to see a smart person admit that there is something they don't know, especially when it is in their area of expertise. The second interesting thing is the question itself. Here's how Rob worded it:
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?
Recognizing that I did not know the answer either, I did a little web searching myself. One of the better and more entertaining answers came from Indie Musician's Music Business Marketing:
Was reading Playboy (for the articles, of course) earlier and found an ad for "Free Sunglasses." You guys have probably seen these as they've been around forever. ...According to "Indie", this paragraph from the Sonic site reveals the answer:
Why would somebody give you free sunglasses? Since people are skeptical about anything that sounds too good to be true, the reason the ad gives for the sunglasses being free is that it's a marketing test. They want people wearing these sunglasses so that other people will see them and pay full retail price. They also want you to send back an "optional" comment card.
But that isn't the reason... I knew there had to be something else involved. Even with a huge markup on postage, sometimes $20/pair, I knew there was something more.
Got on the web site, and picked out a pair. Postage was $15.95, but the glasses are apparently worth $140.00, so why not? Then they offered me a case. It too was "free," but the postage was $5.95. There was also the option of a felt bag.
And while these guys are able to cover their product costs with "postage," (that's not) the real way they make money...
If you'd let us send you two pair of our newest styles when they are developed (approximately two months from now) we'll send them to you FREE, P&H only each ($9.95) and we'll send you a $100 FactoryOutlets Gift Certificate. The FREE styles will be similar to sports, fashion, etc., that you have ordered here today. If you do not like them, you may send them back and keep the $100 FactoryOutlets Gift Certificate and we'll even refund your P&H. We develop styles about every two months and will, if you like, continue to send you two new styles for P&H only each ($9.95) unless after your first delivery (approximately two months from now) you call to say you do not want anymore. The Catch? We include a comment card along with the new styles that asks only six questions that we hope you return to us so we can learn what you like and better create future styles for you.Thus, it seems that
...these guys take (a) one-time purchase and turn it into a recurring one. Genius. How much to you think a fullpage insert in Playboy costs? I don't know, but I know this company is making at least as much money back. As I've said before, if you're not doing recurring billing, you're leaving money on the table!
I'm not sure if I would call this "genius" so much as the application of a tried, tested, and half-true model to a new product-market space. Perhaps "clever" is more apt. Either way, I do agree that we wouldn't be seeing so many of these ads for so long if the advertisers weren't making a handsome return. That they are not sending royalty checks to ZZ Top for the 20+ years of free advertising probably helps the bottom line too!
- ZZ Top -Cheap Sunglasses
Now go out and get yourself some big black frames
With the glass so dark they won't even know your name
And the choice is up to you cause they come in two classes:
Rhinestone shades or cheap sunglasses
Oh yeah, oh yeah, oh yeah
Comments
Well I used to be in the Sunglass business. I can tell you that they are in fact dirt cheap to make. Your average pair of polycarbonate sunglasses costs about $9 to produce. These are glasses that sell between $35 and $150 per pair. You do the math.
There are decent quality sunglasses that cost less then $1 to produce. So yes depending on the quality if you gave the sunglasses for free but charged $9.95 for postage and sent them U.S. Mail you could be making an A markup by "giving Sunglasses away"
Posted by: The Ugly American | December 17, 2005 9:40 PM