What's Wrong with This Proposal?

Someone called me from a website called the Savvy Source with a "partnering" proposal. They "really wanted to work with us." I asked her to email me the particulars and the deal went something like this: We choose an item and discount it 40 to 60% (red flag there.) They email it out to their supposedly local mailing list and the item can be purchased at discount - through their website only, not ours (red flag #2)- for 4 days. We then pay them 40% of total of everything they've sold. (Red Flag #3) The email cheerily concludes, "there is no out of pocket expense for you." ? ? How can we possibly make any money giving them 40% of an item that we are already selling below our cost? ? I emailed them back asking how this could be a good idea for us. Oddly - they never got back to me on that.