Excuse me, but that means the merchandise is donated? There are no costs of manufacturing? I think that's unlikely.
Why? Some people donate money, others donate goods that can be exchanged for money. What is so hard to believe about that? Or is it just possible that the answer conflicts with your presumed conclusion, so you reject it offhand?
During the recent Caribbean Conference, a number of generous FReepers donated goods and services to the attendees. This whole site depends on generosity, and the giving spirit of Free Republic has never failed yet.