Loss Leader

A product which is sold at a price lower than the costs that the business incurs, in the belief that it will lead to sales of more profitable products. For example, a supermarket sells Milk at a loss, but places it at the back of the store, in the belief that someone coming to the shop to buy milk will also buy other, profitable products.

In a 'freemium' model, the free tiers are essentially loss leaders that work to promote the business as a whole.

← Long Tail Low-Touch Sales → ↑ Glossary

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