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Message: <blockquote data-quote="Dannyalcatraz" data-source="post: 5064495" data-attributes="member: 19675">I don't need to look at Baen's data- I've seen the data from other retailers.  Giving away samples is nothing new.  Recording companies have been doing so since the dawn of recorded music.  Restaurants have been doing it since there have been restaurants.(Drug dealers have been doing so since there have been drugs.)No, they're just changing the costs.  Their sales still follow the same economic principles as everyone else's.  Supply/Demand.  Debits/Credits.  Revenues/Costs.The cost to them is the individual lost sale- the person who receives the free copy has no inherent need to purchase a copy.  That the recipient may actually do so is immaterial.  As far as the laws of economics or the rules of accounting go- its a cost.  And if you were so fortunate to look at Baen's financials as opposed to just their sales figures, you'd see that those freebies are reflected as a cost on their ledgers, just like companies all over the world do with the freebies they hand out.But its a cost that is no different than anything else in the company's marketing budget.  They're calculating that that individual lost sale will turn into sales to others, just like another company justifies the cost of an ad in the local paper or a commercial during the Superbowl.IOW, its just another example of the old business adage, "You have to spend money to make money."I won't send you to an Economics textbook for a definition of "opportunity cost"- that wouldn't be nice- so I'm supplying you with a couple I found:The alternative foregone by the company is doing a standard advertising campaign and not giving away freebies in an effort to sell books.  This is an effective way of doing business.By giving away freebies, however, the company is gambling that those free copies will generate more sales than a standard ad campaign.  For Baen, its working.  It doesn't work for all products, though.Imagine Mercedes Benz trying this technique, for instance.</blockquote>

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