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 method is time-honored and ubiquitous, and once you know what it looks like, you will see evidence of loss leaders all over. It’s real: if you have the resources to take a loss on an item that your rival might not be able to rate at a loss, you have a benefit over the competition. A loss leader that operates without a connection to your other products might result in a loss in earnings.

The loss leader market strategy is common and time-honored, and once you understand what it looks like, you will see proof of loss leaders everywhere. If your loss leader strategy includes bringing clients back for subsequent and different products (think games with video gaming devices or more books in a series), this is a fantastic opportunity to construct brand loyalty. It’s real: if you have the resources to take a loss on an item that your competitor may not be able to cost at a loss, you have a benefit over the competition. The rules were made to protect little services from larger businesses 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 earnings.

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