Loss Leader
- A loss leader is a product or service that is sold at a loss, typically to attract new customers, increase sales of other products, or to create a competitive advantage.
Example
The company sold the new smartphone as a loss leader, pricing it lower than its production cost to gain market share and encourage customers to buy other profitable products.
Synonyms
- Similar: Bait, Come-on, Loss-maker, Discounted item, Promotional product
Etymology
- The term “loss leader” originated in the early 20th century in the United States, derived from the idea of leading customers into a store or business with a product sold at a loss.
Denotations
- A loss leader can also refer to a product or service that is not profitable on its own but is used to promote other profitable products or services.