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 ubiquitous and time-honored, and once you know what it looks like, you will see proof of loss leaders everywhere. It’s true: 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 competitors. A loss leader that works without a connection to your other products might result in a loss in earnings.

The loss leader market technique is common and time-honored, and once you know what it looks like, you will see proof of loss leaders all over. If your loss leader method includes 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 construct brand loyalty. 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 a benefit over the competitors. The rules were made to secure little businesses from larger companies and box shops that benefit from loss leading and can manage to take a loss. A loss leader that functions without a connection to your other products might result in a loss in revenue.

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