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

thumbnail

The loss leader market technique is common and time-honored, and as soon as 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 might not be able to cost at a loss, you have a benefit over the competition. A loss leader that works without a connection to your other items might result in a loss in earnings.

The loss leader market technique is time-honored and common, and once you know what it looks like, you will see proof of loss leaders all over. If your loss leader strategy involves bringing customers back for different and subsequent products (think games with video gaming gadgets or more books in a series), this is a terrific opportunity to build brand name commitment. It’s true: if you have the resources to take a loss on a product that your rival may not be able to cost at a loss, you have an advantage over the competition. The rules were made to secure small services from bigger companies and box stores that benefit from loss leading and can afford to take a loss. A loss leader that works without a connection to your other products might result in a loss in revenue.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top