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 strategy is time-honored and ubiquitous, and once you understand what it looks like, you will see proof of loss leaders everywhere. It’s real: if you have the resources to take a loss on an item that your rival may not be able to rate at a loss, you have an advantage over the competitors. A loss leader that works without a connection to your other items could result in a loss in revenue.

The loss leader market technique is common and time-honored, and when you know what it looks like, you will see proof of loss leaders all over. If your loss leader strategy involves bringing clients back for different and subsequent products (believe video games with video gaming devices or more books in a series), this is a fantastic opportunity to develop brand loyalty. It’s real: if you have the resources to take a loss on a product that your competitor might not be able to cost at a loss, you have a benefit over the competitors. The rules were made to protect little organisations from larger companies and box shops that benefit from loss leading and can manage to take a loss. A loss leader that works without a connection to your other items could result in a loss in profit.

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