Getting Paid for Free Services

I have always been amazed at the means by which individuals and businesses are able to provide either deep cuts to the sale price of a product, or provide a “free” service to a customer that still makes them money. We often use the terms “mark-up”, “hidden costs”, or the more mercurial, “smoke and mirrors” to describe this.

So how does someone who wants to tie together wealth and virtue address this particular subject, especially since I engage in making at least part of my income engaged in this type of practice? The answer is, of course, “transparency” – a word overused and under-accomplished by government and industry alike.

I provide a variety of technology and Internet marketing services to businesses and organizations. I also help promote them through various regional websites I control. Many of these customers require website design, hosting, and even domain names. Along with that I create income through various affiliate programs with Amazon, Google, web hosting companies, and various other companies. One customer required my help with setting up a short website to provide some information and to state that the larger website was coming soon. As they required hosting services, I proposed setting up the page for free, but asked them to purchase the hosting through one of the trusted host providers at http://www.prwp.com/best-web-hosting/. I also told them that these providers provided the maximum support and flexibility as well as paying me a fee for each new customer. As business owners, they realized that their cost for hosting would still be the same, but the service from me for the start-up web page was at no additional cost to them. They feel they got something for free from me, when in reality, I received payment from the hosting company and gained a reputation with that small business as a person who is open and is willing to help others with what they felt was an important step before launching a bigger website. They are more willing now to come back to me an pay thousands of dollars for a more advanced website based on this trust.

My first lesson in the way things were priced started when my sister began stringing fresh water pearls and gold finding into beautiful (and professionally created) necklaces and bracelets and selling them at Washington D.C.’s Eastern Market. Many of these were taken as orders during the morning which she would have completed in only a few hours. I recall her selling one necklace for $99.00. I asked her about her costs in materials. It was about $20.00 in all, so a 500% markup was her cost for labor, storage, transport, ordering, etc. What is interesting is that her customers knew this. I later found out why they didn’t mind. In a Macy’s only a few weeks later, I saw a necklace of comparable quality being sold for over $500.00. This would translate to a 2500% markup over material costs. On top of that, Macy’s was offering a 20% discount.

No wonder my sister’s customer was happy. What she understood was the commercial value of the item purchased from my sister in relation to the price she paid. Once more, my sister built a following based on her candor about cost to her clients. By the way, this is the same woman who transformed the open-air market hobby into a multi-million dollar wholesale bead business only a few years later (Google “Blue Moon Beads”) and later sold to Creativity Inc. leading to semi retirement in her 40’s.

Nothing is ever really free, however, Benjamin Franklin's virtues of Sincerity, Justice, and Humility provide an excellent basis for building trust with others to build wealth for yourself.