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Originally Posted by xlogger
You guys seen the "free" video professor informercials rite (pic below)? They claim that this product is free and all you have to do is pay the shipping ($6.99). Any idea how they make the $? I can think of 3 things here..
1. Comes bundled with spyware. (like kazaa did)
2. Over price on shipping. (eg. the shipping would be $2.50 but they charge $6.99)
3. Coustomers will buy paid stuff from them, because this one was free. (unlikely)
(pic, see how it says "free"  )
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#2 is your answer. They can send out a cd for a buck, the rest is all gravy. The costs were all up front in developing the relatively simple software and producing the cds. Once they hit their breakeven point, the margins skyrocket because of the difference in what they charge for shipping and what it actually costs them. This model is all over the web, you give the surfer what seems to be an incredible deal, then backload it with excessive shipping. This gets a lot more surfers all the way to the checkout, some don't see the shipping, some don't know shipping rates, and others are just excited about the good deal up front to worry about it.
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