What? A Free $188 Nightgown Earned Over 70 Million?

What? Give away a women's nightgown for free? You'd be lucky just to break even — and you still expect to make a fortune?

When you hear this idea, you probably picture only the costs — manufacturing, logistics, advertising — and can't see where any revenue would come from. Even with substantial capital and a sizeable team, the odds of pulling it off look like zero.

Yet this is a business marvel that has been widely shared in mainland China, told as something that really happened. The brand worked with only a handful of partners, and what made it remarkable was one piece of creative thinking: a tiny investment that ended up earning more than RMB 70 million!

How Does a Free Nightgown Make RMB 7 per Order?

The nightgown retails in stores for RMB 188. Now it's free — customers pay only RMB 23 for shipping. Naturally irresistible! Here are the costs:

• Online only, no physical store: with no store overhead, each nightgown can cost as little as RMB 8.
• Online partners (sales channels) earn a commission: a RMB 3 rebate for every unit sold.
• A courier handles delivery: normally RMB 10 per parcel, negotiated down to RMB 5 thanks to the sheer volume.

How Did It Sell 10 Million Units?

"Free" is a powerful hook on its own. The brand also narrowed the offer to just two styles — off-the-shoulder and spaghetti-strap — which kept ordering simple, and sold through an affiliate network. Sales quickly reached 10 million units, earning RMB 70 million in the end!

Now look at everyone involved:

• The factory earns RMB 1 per unit.
• The courier also earns RMB 1 per unit.
• The online partners spend essentially nothing on advertising and earn about RMB 3 per unit.

The nightgown company itself didn't need to manufacture, deliver or advertise anything. It simply made this one business decision and earned RMB 70 million — and here's the real kicker: the entire company had just four people!

Strategy Matters More Than Operations

This shows just how crucial strategy is. It shares the same brilliance as the previous article, "Fleecing the Pig, Not the Sheep": the money isn't made from the core business at all!

What Can a Small Business Learn From This?

The lesson isn't to copy the free giveaway literally. Ask instead: which part of the experience are customers willing to pay for, and which partners could share the work of production, delivery and promotion? To test whether a "claim it free" incentive attracts interest, start with a redemption offer form to collect leads and gauge real demand. Once you know people will buy, a mini store lets you sell from a single page, take payment online and cap limited stock. For more ways to find profit in how orders are structured, read "Pro Tip: One Small Shift in Where You Make Your Profit Can Boost Your Sales."