Loss Leader Pricing

Loss leader pricing is a strategy where a business sells certain products at a price lower than their cost to attract customers. The idea is that while these items are sold at a loss, the lower prices draw people into the store or website, encouraging them to buy additional items that have higher profit margins. Retailers often use this tactic to increase overall sales volume, boost customer traffic, and create brand loyalty, knowing that customers may return for more profitable products in the future. It's a calculated way to gain an edge in a competitive market.