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Business
Loss Leader
A product sold at a loss or very low profit to attract customers who then buy other, more profitable items.
Loss leaders are a marketing strategy. They need careful calculation — the extra sales must more than cover the loss on the lead item. Online, it's often combined with email capture or retargeting to maximize lifetime value from each visitor.
Used wisely, it helps new or competitive stores gain market share.
It's like supermarkets selling milk cheaply to get you in the door, hoping you'll also buy the higher-margin snacks and bread. The cheap item brings traffic; the real money comes from what else people buy.
Real world: Some e-commerce or dropshipping stores offer a popular gadget at cost or a loss in ads. Once customers are on the site, they see upsells, bundles, or related products with better margins. It works if the average order value rises enough.
💡 A smart loss leader brings customers in the door — the goal is to make more money overall from the visit.