Saturday Deep Dive: Loss Leader

Today's dive into the deeper archive of Webcomics.com comes from Oct. 27, 2009, when I shared some advice on pricing merchandise.

When your local grocery store offers an item -- say a loaf of bread -- at an extra low price, that item is being used as a loss leader.

A loss leader is an item that is sold for little or no profit (even, literally, at a loss) for one reason and one reason only. To encourage you to walk into the store. Because, the grocer knows that once you walk into the store, you're not only going to buy bread, but you're going to probably buy milk, eggs and maybe even those little cookies with the chessmen on the

When the total sale is rung up, the grocer had made a tidy little profit. All because he was willing to take a loss on one of the items.

And you can, too.

One of the best things you can feature in your store is a small, inexpensive item that you can use to drive people to your store.

For example, last year, I offered a set of three buttons. (The link is for example purposes only; the offer is no longer available.) The buttons cost me about 50 cents apiece to have manufactured, and I offered to sell all three for $3. It was a decent profit, but certainly nothing that was going to make-or-break my year.

But where the buttons really came in handy was when I offered to include all three buttons for free with the order of any book from my store. Orders jumped instantly. People were willing to place an order that they most likely wouldn't have placed otherwise -- and all because I was willing to include free merchandise that set me back all of a buck-fifty.

In the end, I was able to spur sales at my store -- and make my readers happy -- all at the same time.

Hardly a loss.

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