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Loss leader

Pricing a product at cost or less than cost price to attract new customers, with the hope that profits will be made on future or additional purchases.

An example of a loss leader is to lure customers into a store where they are more likely to buy other goods by the marketing of inexpensive products. The vendor stratises that the customer will purchase other items during this time as the loss leader and that the profit made on these items will be such that an overall profit is created for the vendor.

See also:
Cost–benefit analysis
Market skimming pricing

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