Why Small Businesses Need To Beware of Loss Leader Pricing Tactics (& How To Do It The Right Way)

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The loss leader market technique is common and time-honored, and as soon as you understand what it looks like, you will see evidence of loss leaders everywhere. It’s real: if you have the resources to take a loss on an item that your competitor might not be able to price at a loss, you have an advantage over the competition. A loss leader that functions without a connection to your other products might result in a loss in earnings.

The loss leader market method is time-honored and common, and when you know what it looks like, you will see evidence of loss leaders all over. If your loss leader strategy includes bringing customers back for subsequent and different products (think video games with video gaming gadgets or more books in a series), this is an excellent opportunity to develop brand loyalty. It’s real: if you have the resources to take a loss on an item that your competitor might not be able to rate at a loss, you have an advantage over the competition. The guidelines were made to secure small companies from larger companies and box stores that benefit from loss leading and can afford to take a loss. A loss leader that operates without a connection to your other products could result in a loss in revenue.

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