what is a loss leader pricing strategy
Understanding Loss Leader Pricing. The word âlossâ is enough to scare any indie retailer off, but hear us out. Loss leader pricing is a strategy stores use to gain customers into their stores to buy something that will then also allow them to shop other items in that store.
Leader pricing is a common pricing strategy used by retailers to attract customers. It involves setting lower price points and reducing typical profit margins to introduce brands or stimulate interest in the business as a whole or a particular product line. Products sold in this strategy are often sold at a loss. Such products are referred to as loss leaders.