Why I Think $0 Products Are A Bad Idea

December 5, 2014 at 2:50 am Leave a comment

Recently, a large digital product marketplace site, which I won’t mention, has announced that they will be running a $0 product sale. I question whether this is a good idea or just another gimmick.

The idea behind $0 products is that people can get something for free to taste or sample the quality of the product. In theory this is a good idea because people can “try before they buy”.
At retail stores like Costco, offering samples has been shown to create a 50 to 60% increase in sales. This article in The Atlantic includes some graphs showing the increase in sales: The Psychology Behind Costco’s Free Samples. The article makes the argument that if you go into Costco’s with no intention to buy sausage wieners, but then have a sample, you might think they’re good, and buy an entire box. The samples actually become a good investment from Costco because their accountants know that X number of people will buy after they sample.

However things are much different for digital products.
For starters, many digital marketplace sites that offer products for sale also offer free items. So if people can download free items, why does the site need a $0 product sale? Why can’t people download the free items to sample the quality? Why can’t the merchant release a product for free?
If this is supposed to be “giving back to the community”, why not make the product completely free instead of a “$0 product”? The merchant will still make the same amount of money (none), but the customer may not have to go through a lengthy shopping-cart check-out process to download a free item.

Second, in my own experience, I found that many people buy simply because they see a cool product with a low price and they have to have it. This is called impulse buying and many of these people won’t actually use the product in a project. In fact, many of these people simply buy at the low price, download the product, and let it sit on their hard drive.
Some people will argue that it’s good to get a product while it’s free and save it for later, just in case they have a project that needs it. But, realistically, will the person be able to find the product in their 5G folder of other downloaded content when they need it? And if they have that much content, will they even remember they have a specific item?

Therefore, if a customer doesn’t use the product, how does he or she know the quality? And if he doesn’t know the quality of this product, how does he know the other products are also good quality?

So if the $0 products are meant to be samples for people, what good are they doing? How is this kind of discount increasing sales for merchants?

Entry filed under: Digital Goods. Tags: , , , , , , , , .

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