There are lots of reasons. One of the best reasons is it helps establish your writing ability and expertise in a certain area.

Another good reason is to draw attention to your other ebook that you really selling. There's a good deal of profit potential in this strategy. But even if you're giving an ebook away, as an incentive to joining your email list or to sell your other ebook, you still have to follow some common sense marketing rules.

The first and best way of giving away a free book is by 'selling' it.

I'm not being smart...honest. Whether or not people pull cash out of their pocket to acquire your ebook is irrelevant. It still must be 'sold' to them....or rather they have to be sold 'on it' before they will:

1) Take the time to read your offer of a 'free ebook';
2) Take the time to download it;
3) Open the darn thing and actually read it (which, I'm guessing is your goal)

Consciously or unconsciously before anyone takes advantage of a "free offer" of any kind they look at the opportunity cost (i.e. accepting your offer over ever other offer they are presented with at that moment).

If your offer is the best available at that moment and it's compelling - most people will take advantage of the opportunity to at least read your offer and download the book.

A well structured, benefit rich, compelling offer is a prerequisite to "free" or "for sale" ebook offers.

Being a stubborn SOB, I learned this stuff the hard way- by trial and error...lots of errors...until it actually started clicking.

Now, having said that, here are some sources that are better than others for promoting a free ebook. One of the best ways to promote an ebook is to offer it on eBay as a test (eBay does not have a 'free' area- yet so you'll have to really 'sell' it, even if it's only a penny). My ebook 'eBay Secrets' details how to do this successfully, but there are many resources (a lot of the free) that can help you as well. Just do a search on Yahoo for “ebay marketing” and see what happens!

Here are some additional resources to help to start promoting the book through articles, posts and directory listings, etc:

http://zden.com/
http://infopost.com/
http://ebookad.com/
http://ideamarketers.com/
http://ebooknet.com/
http://sellyourbrainfood.com/ (resource)
http://www.klockepresents.com/
http://www.gettingtraffic.com/

Finally, give your readers a chance to join your 'updates list or 'announcements list'. Building your own email list is the easiest and most profitable long term strategy you can employ.

That should get you started!

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David Vallieres is an ebook author, publisher and the CEO
of ePublishingEtc.com, a leading digital publisher
specializing in business titles with royalty-free resale rights.
Web Address: http://epublishingetc.com/?wiley