When Free Samples Aren’t Free

With the advent of internet sales came the trend for free samples throughout the industry.   A few years ago it was considered the cost of doing business and indeed was less than the traditional costs of acquiring a customer in the promotional products industry.  However as the online industry continues to mature the trends are now clearly headed in the other direction.  A search of sample policy on a major search engine will quickly demonstrate the proverbial worm has turned regarding samples.  We will attempt to explain why this quantum change has occured.

Several years ago during the dot com boom investors were willing to spend tens of millions of dollars developing ecommerce enabled websites.  Literally dozens of dot com promotional products companies came and went in a matter of a year or two.  One of the largest distributors almost went out of business after spending a quarter of a billion dollars buying an ecommerce site that produced no sales.   After dropping that type of cash the cost of free samples could be easily justified by the bean counters.   A more careful examination shows that the practice of providing free samples can be one of the biggest hinderances to an organizations bottom line.  Take for example a recent sample order we provided for a large multinational.   They requested the Leeds Excel Sport Duffel at close to ten dollars, the Gemline Regatta Race Tote at about the same, the Gemline Hampton Insulated Tote at almost twenty dollars delivered and last but not least the expensive Gemline Vertex Large Sport Duffel which took the prize as most costly.   Overall we estimate the time involved cost of goods puts the order at well over $150.  The net return was zero as the client not only did not order but never afforded the opportunity to bid on what they did order.  Was our experience unusual?   Hardly.   Reading through the policies of many of our esteemed colleagues it quickly becomes clear that our experience is the rule and not the exception.   Approximately 80% of the sites we visited strictly state they no longer offer free samples ever.  Several actually go on to cite self studies that show close to 98% of all sample orders resulted in no actual order being placed.   Worse not only did these studies show no order at the time but they show no orders ever.   That would indicate the absolute worst investment a promotional products distributor can make is offering free samples without restriction.  Out of the remaining 20% about half of the distributors state they will charge the customer only if the order is not placed, the other half state they will charge for any products not ordered.  In the above example if four samples were ordered and an order for only one placed, a significant number of distributors would still charge for the other three.  

The big manufacturers, Leeds for instance and Bic as another example no longer offer free samples online.  They too have found that in the majority of cases free samples are simply a line item deduction from profitability.   We still provide free samples to existing and in some cases potential clients but our policy is much stricter than it once was and in all cases customers are informed they will be charged if an eventual order is not placed.  That leaves our reps to make the decision later on whether or not to charge for the items.  We believe our policy is fair and is in line with the rest of the industry.   As several others have stated on their policy pages we offer top of the line products from proven vendors.   We offer large photos and full product information which eliminates much of the need to see and touch a product.  On large orders we insist on product proofs to insure the accuracy of a persons order.   In short we take every step to guarantee an order is up to the expected quality and believe these steps circumvent the need for a pre-order sample in many cases.

As the industry continues to evolve we expect many will continue to tighten their belts with regards to samples.   Somewhere along the line the remaining distributors offering totally free samples will realize it is a tremendous loss leader that takes valuable time away from productivity activities.   Like one prominent industry official said recently “you don’t get free samples at Best Buy or Home Depot, why should you get them from me?”   Obviously existing customers deserve samples as required for their loyalty but the economic situation dictates changes, and charges for most others.