Sunday, May 30, 2010

Random Samples

Here's another free business idea... again, not as good as Keliso but you could probably make a lot of money doing it.

The basic concept is a sample mail-out business where people pay for the samples. Why would anyone PAY to get junk mail you ask? Well, they will pay for the chance to get stuff. Here's how it works:

  1. Set up a website that has a membership list.
  2. Set up a paypal account these members can send money to.
  3. Pay a little to advertise to businesses that you will ship out their samples to customers for free. All they have to do is mail the samples to you in a big box.
  4. Create categories of samples that members can opt-in for. Make sure everyone is automatically signed up for the "random" category and use that when something comes in for a category that no one has opted into.

    And, now the fun begins...

  5. On the website, list standard package sizes and how much shipping and handling cost for each.
  6. On the website, list the current sample inventory for each category, showing which package size each will fit into. There should be full discloser here, with counts for each sample and the shipping date.
  7. Let members contribute to the paypal account, whatever they want.
  8. For each member, in random order, start with the biggest package they are willing to pay for, and fill it up with whatever is available in the categories they've opted into. If they signed up for a "special promotion" (see below) then fill up the next-smaller shipping package they can afford if there aren't any special-samples left.
  9. Mail the parcels.
So, back to the original question. Why would anyone pay to have junk mailed to them? Well, because SOME of the junk is really great, and they don't know what they're going to get. It's basically a small-scale lottery with a garage-sale mentality. It's cheap, it's fun, and you get random junk in the mail. Hopefully, it's addictive.

Now, for making money doing this.
  1. Right off the top, take a 20% handling fee on the shipping cost. This is this business's main profit center.
  2. Advertising on the website, of course.
  3. Let customers opt-in for "special promotion" emails. Then let companies pay you to announce a really nice sample is available, and everything about it.
Here's an example of how it would work. A manufacturing company (doesn't matter what, really) gives you a few great samples; say free DVD players, or movies, or whatever; and a box full of brochures. You announce the DVD players, or whatever, on your website, maybe along with email notifications if the company pays you for that, and your members go... WOW! a FREE DVD player, maybe. But, the DVD player is in the $20 shipping category, so a bunch of members toss $20 in your paypal account. Randomly, after a set (and published) time, you ship off the DVD players to the lucky people. Everyone else gets other samples shipped to them, all be it in a smaller shipping category, including the DVD brochures. Everyone gets something, maybe only shampoo samples, but something. The sample-supplier company gets targeted advertising, and your company makes money. Everyone's happy.

Some key points:
  • If someone signs up for a special promotion but doesn't get it, ship a smaller package instead such that the member has left-over funds and doesn't feel ripped-off. This will also keep them active in the system and trying to get the next special promotion that comes along.
  • Have time-out periods and automated email notifications when a member's shipping fund is within 20% of the next bigger shipping size. For example, if they have $18.25 in their account, email them to say "You know, if you contribute just $2 more, you'll be eligible for -this list- of great samples. If you do nothing by -date-, we'll send you a $5 shipping package instead."
  • After a period if inactivity, start shipping smaller and smaller sample-packs until the member's shipping fund runs out, or is below the minimum to ship anything. This will be a good way to get rid of all the less-desirable samples. It will also remind the member of the system each month, and that their shipping fund is being whittled away while they do nothing.
  • Fill shipping boxes up to the weight limit by adding smaller low-value stuff that will fit.
  • Coupons would make for very low-value shipping. Just stuff an envelope until it nears the weight limit.
  • Create ways that very active members can increase their odds at getting the special promotions. The more website activity, the more advertising revenue.
  • Locate the business next to a convenient postal center.
  • Keep the inventory low by mailing out everything within a set time.
  • Make sure you don't get more samples than you have members willing to ship. Once things get rolling, create a company "sample authorisation" number and refuse to accept any package without one.
  • Start charging companies that want you to distribute more low-value samples than your members want.
  • Eventually, when companies start paying you more to distribute their samples, start lowering the handling costs. As this is a free idea, anyone can do it and you're likely to have competition. The big players will have an advantage, so start quickly.
Anyway, that's the idea. It's free, it's published, and anyone that wants to can make a go if it. I expect no remuneration, but do expect attribution. You need to tell people where you got this idea, but that's all. Go for it if you want. I don't expect anything for publishing this idea but if you get wildly successful at it, feel free to toss me some money. I won't mind.

Oh, and Keliso is a much better idea, with much larger profit margins. Think about it...

You can view more about Keliso here