loss leader
A loss leader sale is a tactic that sellers use to boost sales by pricing an item below market value to draw customers in, in the hope that the customer will purchase more items from them. The seller may take a loss on the item that is below market price, but the strategy is often effective in boosting sales.
The strategy is used in brick-and-mortar stores, online, and by certain industries. A brick-and-mortar store may place its loss leader somewhere that would require customers to pass other merchandise to encourage them to purchase other higher-margin items. Additionally, certain devices may be sold at a loss to bring customers into the product ecosystem. For example, printers and video game consoles are often sold at a loss, but are profitable in the long run because the manufacturers profit on the sale of ink or video games that can only be used with their respective devices.
[Last reviewed in April of 2026 by the Wex Definitions Team]
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