A loss-leader

palabra86

Senior Member
Spanish
What means the term "loss-leader"? Because that it has the word loss I guess it has to do with lossing profits, but the "leader" is unclear for me

Many products have a consumable element – fuel, oil, filters, etc. It’s common for the consumable to be a big money-maker for the company (like razors and razor blades, where the razors are sold as a loss-leader to get a revenue stream of razor blade sales). However, what if your products could automatically order their consumables when they’re needed?
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  • Uncle Jack

    Senior Member
    British English
    It means selling a product so cheaply that you make a loss on it, but doing this in a way that entices people to buy other products. The way this works is two-fold. Firstly, it entices people through the door (or onto the website), where they may discover other, more expensive (and profitable) products to buy, and secondly, it makes people think that if this product is so cheap, then perhaps all the products in the shop are cheap.

    Loss-leaders are usually popular products of low value, where the loss on their sales is relatively small.
     

    Packard

    Senior Member
    USA, English
    The best example I can think of is newspapers. Typically stores that sell newspapers do not make enough on the sales to warrant the amount of work that selling them entails. But very often the buyer of the newspaper will buy a cup of coffee or a pack of cigarettes and those are more profitable.
     

    Linkway

    Senior Member
    British English
    Using the example of razors and blades in the original post, if I persuade you to buy a Waylink Razor now because it is cheap, you will probably keep buying Waylink Blades even if they are not cheap. Only Waylink Blades fit Waylink Razors, so I have you hooked!

    Laser printers and inkjet printers are often very cheap compared to the consumables (toner and inkjet cartridges).
     

    Packard

    Senior Member
    USA, English
    And Polaroid cameras were sold at a loss (so I have read) to sell the expensive film.
     

    The pianist

    Senior Member
    English - US
    And Polaroid cameras were sold at a loss (so I have read) to sell the expensive film.
    The most common example which no one seemed to know is the car dealership. Put a pre-owned car in front at a low price. That's the 'bait', and then comes the 'switch'.
     
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