Definition, Meaning & Synonyms

loss-leader

Noun

/ˈlɔs ˈlidər/

Definition

A pricing strategy that involves selling a product at a loss to attract customers and encourage them to purchase other, more profitable items.

Examples

Many supermarkets use milk as a loss-leader to entice shoppers into the store.
The tech company implemented a loss-leader strategy by offering its new gadget at half price to boost sales of its accessories.
During the holiday season, toy stores often feature popular toys as loss-leaders to increase foot traffic.

Meaning

The term ‘loss-leader’ refers to a marketing tactic where a retailer strategically reduces the price of a particular item, usually below its cost, to draw customers into the store. The idea is that once customers are attracted by the lower price, they will also buy additional items that are priced at a normal or higher profit margin.