What is a 'loss leader'?
A loss leader in business is something on which you lose money in order to attract customers to your enterprise in the hope that they will buy products on which you will make money. The client is 'led' into the store by an item that causes a loss. For example: in a small grocery store, the owner may buy lettuce for five units of currency but sell it for three units of currency. S/he will then lose two units per item sold. However if s/he is making a profit of three units on the peas and four units on the carrots and six units on the asperagus, AND the consumer who comes in (because they are attracted by the price of lettuce) also purchases other vegetables, the overall profit by the business has been achieved. Hence, the loss leader.
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