I thought this was kind of interesting as recently I was watching the news and there was a segment about a store that drew a large crowd for a sale. The lineup was long enough where some people in the media made a news story about it. Essentially, the store got free TV advertisement that way. Thing was, this was anticipated by the company.

That should make you think whenever you are thinking of spending a large amount of money to advertise something. Example, let’s pretend that you would normally spend about $15,000 for a 30 second TV spot and that you sell cameras where you normally sell them for $300 to make a profit. Instead of using that $15,000 on say TV advertisement to get exposure, imagine if you allocated a large chunk of your $15,000 where you are willing to sell like 300 of those cameras for like $50 with a one limit per customer.

You can imagine the amount of people and exposure you can get from that. Not only that, more than likely with that much people you will get some kind of free advertisement whether it be people spreading the word since the price is pretty crazy or people in the media taking notice of the crowd and then essentially giving you free advertising if they report about it.

I was just reading about this online sale that a large company was implementing where it was selling various items at a huge discount. To add to the suspense you won’t know what is going to be on sale until the last minute. Therefore, you have everyone scattering at the last minute which creates buzz. While they are definitely good deals, the stock quantity is extremely limited. Example, imagine buying a $1000 TV that is on sale for $500 and they only have one available for sale.

Usually companies do this simply for exposure. Especially those that want you to sign up for say a newsletter to do so. I know many times people would ask how they can afford to lose that much money selling the product even if it is for exposure. For that point, just think of how much say a traditional TV ad can cost.

Let’s be nice and say it is $20,000 for a 30 second TV spot. So like with the TV let’s pretend it has to sell for a thousand just for you to break even. Instead, for this promotion you sell it for $200. Assuming we are using the $20,000 example that you would have normally spent for advertising, instead you now sell 25 of those TV’s for $200 which means a $20,000 loss. Considering every other place sells it for $1000+, you can imagine the buzz and word of mouth advertising that could be generated this way.

In many ways you can consider these as loss leaders too. But a lot of times as a consumer when I see companies offer these types of promotion with such limited quantities I am not exactly going to spend all day hoping to get one at that low price as it is almost like winning the lottery. In so many cases too usually someone on the inside gives away the information ahead of time to friends and family members who end up getting it first too as well. Time better spent making more money I’d say.