I think you’re missing out on the lifetime value of a customer. Obviously when you do something like this, you’re not planning on making a big profit from THAT DVD. What you would be doing though is generating new customers who had never purchased from you before. These customers will then be likely to buy other products from you (assuming the one you offered helped them).

I’ve had deals like this multiple times. The obvious factor is you MUST have other products you profit from also for something like this to make sense.

In other words, you’re getting your products in the hands of people who may never have purchased from you…who can purchase other products from you.

In fact, I’m doing a deal like this soon where I’m providing products totally freely to someone else who will be discounting them in a package. My actual return gift -zilch…except the fact that now that person will be saying great things about my product with a limited number to offer (100 sales is a very small number for example).