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Getting freebies from brands sounds like such a good deal but is it?
Of course, some products can come in super handy and might be something you’re even interested in buying, even if you don’t get it for free. But other products might be crap, and then how about the value of your work, and are there tax implications?
These are definitely things to consider.
How do freebies as payment work?
Typically, creators with a decent size following get messages from brands that offer them a free product in exchange for a video, social media post, or something similar along those lines that discuss the product.
It sounds like a sweet deal—especially the first time a brand messages you. But, in essence, the free product is the payment for the service of promoting it.
Read next: Is free marketing a thing?
Why do companies offer a free product as payment?
From a business perspective, it certainly can make sense for the brand. You send your new product to an influencer, and they’ll do a video or social post about it. The cost to the brand is pretty minimal.
I would argue that some brands also try to require too many things in exchange for simply sending you a free product. For example, if I’m doing a sponsored content campaign, brands have requirements for the campaign. That’s different as they are paying for my time and content expertise and reach.
Some brands might request reviewing posts or even revisions when sending a free product. But at the end of the day, they’re not working with you as an influencer. Instead, they sent you a free product but want to work with you like you are a freelancer they hired.
Read next: Are content production goals a good idea? Or pay them for performance?
There’s also a second set of brands that email and ask you to buy a product online. They claim that they will reimburse you after you purchase it and after you have published a video or social post.
Always be suspicious of anyone that reaches out to you and asks you to upfront the cost. I would never enter a deal like that. How do you know that they will pay?
What are the cost and dangers of freebies?
There are several things to consider.
Is there a tax implication? Please check with your accountant on this. I treat free products just like income. So if somebody were to send me a $2,000 product that I will publish a video about, that $2,000 in the product is revenue. And I have to pay U.S. taxes on revenue. That includes revenue in the form of freebies.
How do you know the product is any good? When people slide into my DMs or my inbox unsolicited, how do I know their product is any good? Most of the pitches, I’ve never heard of them. It’s not like Apple is offering me a free iPad Pro!
How to handle free product pitches?
We have to think about our goals and also our brand. Doing videos on crappy products won’t help us long-term. Paying upfront for “free” products and not getting at least paid back the cost is also not a sound financial strategy.
And let’s not forget about the amount of time it can take to talk to people. Here’s one exchange as a way of example.
A freebie pitch example
Them:
I’m xyz, and I just started a company that’s expected to ship 200 to 500 products this year. These products cover a wide range of categories. I have been following you for some time, and I think your image temperament and video style are outstanding. I hope you can help me shoot the video of the product on Amazon. You can play the content of the video freely. In return, I’ll let you have our product for free.
Me:
Happy to participate. My fee to create a video for you is US$249.Them:
Please send me your account linkI share my Amazon Storefront link, which already should be a red flag. Why are they reaching out to me if they don’t even know my content?
Them:
May I show you my product?Me:
Yup.They share links to their products.
Them:
These are some of my products. I have many other categories. If you can make videos for me, I will give them to you for free.Me:
My fee is $249 and I can do three product videos. Here’s the link to pay.Them:
Can we charge no commission? There is no budget for our products, and the value of my products will only get higher and higher, and the value of my products is between 20-500 DOLLARS. I can provide you with 50-100 products a month, so that you can have more opportunities to get commissions from Amazon.Me:
Correct. You don’t have to pay me commission but you do have to pay that upfront fee. I’m not taking a tax burden for your products. I don’t even know youThem:
No need to pay in advance, I can ship you all the products.My budget is only $10 for one product, which is the most I can get
I can provide you with 1,000+ products a year, so that you can have more opportunities to get commissions from Amazon. I believe that all of us are together for the better.
Is that worth it?
So all that, and they sent me an offer of $30 (as a counter to my bid of $249, which was already lower than my initial quote).
Conclusion: Are freebies worth it?
As you can see, that conversation takes time, and when you get a bunch of these pitches, it certainly can be a huge time suck – especially when brands aren’t willing to pay anyway.
But, of course, it’s a personal business choice at the end of the day. If you accept freebie products as payments, make sure you know those rules. If you prefer to get paid in other ways, consider setting up a web page to send brands to or use Google auto-responses that can at least respond to messages coming in via email.
Also, keep in mind that plenty of brands do pay for their influencer campaigns. You can see some of the rates in this Onalytica research.