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The Madison Avenue Field GuideA field guide to marketing & advertising, by Brandon Mina

GlossaryStrategy & FrameworksLoss Leader

Strategy & Frameworks

Loss Leader

Pricing a product at or below cost to attract customers who then buy other, more profitable items.

By Brandon MinaCEO, BrandPilot AIUpdated November 2026

Short answer

A loss leader is a product priced at or below cost to attract customers who then buy other, more profitable items. Retailers often use staple or high-visibility goods for this purpose. The strategy works only if enough customers make additional purchases, and in some jurisdictions below-cost pricing is legally restricted.