From Birchbox to BeautyArmy, Grappling With the High-Cost of Freebies
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As the founder of skincare line S.W. Basics, I receive dozens of emails from companies asking for free samples. I have heard every reason in the book as to why they need to get their hands on these samples -- reviews, giveaways, subscription boxes, events and daily deals. As they put it, participating would help us generate traffic, boost sales, increase fans organically -- and all for free!
True that all these perks are great publicity, and in a saturated market, any exposure is good exposure. It can be incredibly difficult to get your product in front of new customers and even more difficult to get to the right market of people.
And the people and companies vying for samples know this, putting them in a position of power. Want access to their networks? It’s going to cost you. They can call it free all they want, but when you’re giving out product, it is as if you are paying them.
Plus, samples often won’t even cut it. They want full-sized items, as they would appear on a shelf in a store. This means not only are you losing the money it cost you to make the item, you’re also losing the potential sale altogether. If you make an item that sells at $30 and they’d like 4000 of them, do the math -- it's a lot of money. And that quantity isn't even on the high-end -- there are subscription boxes like Birchbox and Glossybox with hundreds of thousands of members.
Recently, I was describing my predicament with a fellow entrepreneur. She said she no longer sends free products out to anyone, ever. This includes wholesalers, potential new accounts, and stores. She’s been burned so many times by people saying they are interested and then disappearing after a bunch of free products were given to them, she now requests they purchase samples through her site.
I understand where she’s coming from, yet I am torn if this is the route I should also take. It’s tricky. In an era where customers can shop virtually anywhere for 50 percent off if they wait for the right deal or get endless samples at their doorsteps for $10 a month, should I be giving in to these demands?
Until I figure that out, I’ve made a few rules for myself:
- Is it exactly my target market with absolutely no compromises?
- Have I heard of it before?
- Are they willing to pay to cover any of my costs?
- Do I like the person pitching me the idea?
For now, at least, it’s all about the little compromises.
To follow the ups-and-downs of running a startup, check out The Grind.
How would you handle the issue of freebies? Let us know in the comments below.