Definition

Noun: A loss leader is a product that is sold by a store at a price below its market cost or even at a loss. The primary purpose of this strategy is to attract customers into the store with the expectation that they will also purchase other, more profitable items.

Usage

This term is used in business, retail, and marketing contexts. It describes a specific pricing and promotional strategy. The word "loss" refers to the financial loss taken on that specific item, and "leader" refers to its role in leading or drawing in customers.

Examples

• The supermarket uses milk as a loss leader to get people through the doors.
• Selling the new video game console as a loss leader is a common tactic to sell more profitable games and accessories.
• The loss leader strategy worked; customers came for the cheap printer and bought expensive ink cartridges.

Advanced Usage

• "to use something as a loss leader": This is the most common construction, describing the strategic action.
  • The electronics store used the popular headphones as a loss leader during the holiday sale.
• The concept can be extended metaphorically in non-commercial contexts to describe any initial offering made at a disadvantage to secure a greater benefit later.
  • The free consulting session was a loss leader to secure the long-term contract.

Variants and Related Words

• Leader pricing: (n.) The broader pricing strategy of which using a loss leader is the most extreme form. It involves setting very low prices on key items to generate store traffic.
• Doorbuster / Doorbuster deal: (n.) A deeply discounted item, often available in limited quantities, used to attract customers, frequently synonymous with a loss leader in promotional events.

Synonyms

• Draw item: An item used to attract customers.
• Leader: In retail contexts, this can be shorthand for "loss leader."
• Traffic builder: A product or promotion designed to increase the number of customers.

Antonyms

• Profit leader: (n.) A product that is a primary source of profit for a business. (Note: This is a less common, contextual opposite rather than a standard dictionary term.)
• High-margin item: (n.) A product sold with a large profit margin.

Related Idioms and Phrases

• "To take a loss on [something]": This phrase describes the action of selling an item for less than it cost, which is the core action of a loss leader strategy.
  • We're willing to take a loss on these tablets to build our customer base.
• "A foot in the door": While not exclusive to retail, this idiom relates to the strategy of using an initial, often discounted, offer to begin a business relationship.
  • The low introductory rate was just a foot in the door.

Noun

1. a featured article of merchandise sold at a loss in order to draw customers