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IQ News: Freesamples.com to Roll Out Beta Site

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Whoever said "There's no such thing as a free lunch" never heard of freesamples.com. The San Francisco-based online business is expected to roll out a beta version of its Web site this week.
Freesamples.com will offer users free samples of household goods, health and beauty products, snack food, entertainment items and pet toys, among other things, according to CEO Jeff Malkin.
Malkin said freesamples.com is not just a giveaway site, but "a research company." The company gathers anonymous information from users such as purchase decisions, product preferences, gender, income and geographic area. This data is then passed on in aggregated form to the firms offering the free samples.
"We can help brand managers focus their dollars," Malkin said. Users who visit the site begin by supplying their ZIP codes, then selecting the samples of their choice. In order to finalize the order, they must answer questions about their age, gender and income level. "They also must answer two questions per product" for each free sample, Malkin said. The company supplying the samples composes the questions.
After the user receives the samples, freesamples.com follows up with e-mail questions about the products, offering cash rewards for every response. "This gives companies information they have never before been able to obtain," claimed Malkin. "In the past, a company could spend millions on free samples and not know if [the effort] worked. Even if sales went up in local stores, the company wouldn't know if it was the samples or some other factor."
When users return to the site after their initial visit, they see a customized top-level page based on what information they shared and which items they chose during previous visits, said Jamie Kohn, the company's marketing manager.
While there are other free sample-oriented sites on the Net, such as Samplit.com, few engage in the kind of lengthy information-gathering used by freesamples.com. "We're not just a sample distribution system. It's the real data we're focused on," said Malkin.
Freesamples.com's revenue stream comes from the companies whose free samples are offered on the site. Freesamples charges companies "for putting samples in the customer's hands, as well as the value-added feature of feedback the customers give on the samples they use," Kohn said.
Commenting on the firm's business model, Malkin said, "Freesamples.com is where your target finds you."