Jim, a friend in Atlanta, created an information product to promote his software business. He offered this infoproduct on eBay for one cent and created a Dutch auction with 10 of these products. His insertion fees (at the time) were $2.50 and he ran these auctions for 10 days at a time.
Jim and I compared costs. One week in the “Atlanta Business Chronicle” was $56. Ten days in the “Atlanta Journal Constitution” would have cost $134. If Jim so desired, he could have run this same ad every day of the year for $91.25 on one of the top Web sites in the world. Quite a bargain!
Does Jim care if he actually sells his report? (Especially for one cent which would be a giant pain to collect.) No way! What he is doing is building traffic to his Web site. He attracts dozens of new visitors (i.e., potential buyers) each week.
Let’s look at another business that uses this strategy...
This gentleman is advertising his free book on Yahoo auctions. There is no charge for listing on Yahoo so this publicity costs him nothing. Why does he say the book is free, and yet lists it at one cent? The answer (even though I’m sure you knew it anyway) is that these are auction sites, not “ad” sites. Therefore, all merchandise must have a price, no matter how minimal.
His goal is crystal clear... to promote his Web site for free.
