loss-leader

A store advertises a popular video game as a loss-leader to attract customers.

Definition

Noun (countable): A product or service sold at a price below cost to attract customers, with the expectation that they will also purchase other, more profitable items.

Usage Examples

• (The store sells milk at a loss to attract customers who will then buy other items at a profit.)
• (The printer is sold at a loss to draw customers who will buy the profitable ink.)
• (The service is priced low to gain subscribers who will eventually pay for higher-tier options.)

Advanced Usage

• "To function as a loss-leader": to serve the strategic purpose of attracting customers through an underpriced item.

  • In the competitive smartphone market, the budget model functions as a loss-leader for the flagship line. (The cheap phone draws buyers who may upgrade to the expensive model.)

• "Loss-leader pricing": a pricing strategy where a product is deliberately sold at a loss to boost overall sales.

  • Loss-leader pricing is common in grocery stores during holiday seasons. (Stores use this tactic to increase foot traffic and total revenue.)

Variants and Related Words

• Loss-leader (adj): describing a product or service used in this strategy.

  • The loss-leader strategy requires careful financial planning to avoid long-term losses. (The approach must be managed to ensure overall profitability.)

• Loss-leadership (n): the practice or policy of using loss-leaders.

  • Loss-leadership is often criticized for harming small businesses. (The practice can create unfair competition.)

Synonyms

• Bait item: a product used to lure customers.
• Leader: a product sold at a low price to attract trade (short for loss-leader).
• Doorbuster: a deeply discounted item used to draw crowds, especially in retail sales.

Related Idioms

• "To take a loss on": to sell something at a price below its cost.

  • We took a loss on the first batch of toys, but the second batch sold well. (We sold the first toys at a loss to attract customers.)

• "To lead with": to use a cheap product as an initial attraction.

  • The store leads with discounted electronics to get people in the door. (The store uses low-priced electronics as loss-leaders.)