Thus, it can be used to build a customer base. Another advantage is that loss leader pricing is an excellent way to attract shoppers to a new location, since they might otherwise never enter the store, but will do so to take advantage of a particular pricing deal. One is that when buyers purchase other items in addition to the loss leader, the seller can make a larger profit than would have been the case if it had not offered the loss leader. There are several advantages to the use of loss leader pricing. This practice is also used by the manufacturers of ink jet printers, as well as a variety of stores just before Christmas, when they advertise deep discounts for early-morning shoppers. One of the heaviest users of loss leader pricing is grocery stores, which routinely advertise low prices on selected items. In this case, the assumption may be that the seller will initially incur a loss, but will earn a profit in aggregate over the course of several subsequent purchase transactions. The concept can also be used to attract entirely new customers. Conversely, inadequate merchandising would place these items near the front of a store, where someone could buy them and proceed directly to the cash register without purchasing anything else.

The loss leader concept can be used to bring customers into a physical store location or to access a website - in either case, selected merchandise that is much more profitable will be positioned near the loss leader product, so that buyers have every opportunity to make additional purchases.Д¬orrect merchandising is a key part of the use of loss leaders, so that buyers must walk past many other items in a store before finding the loss leader item. The resulting combined sale transaction is assumed (or hoped) to be profitable. This is done on the assumption that buyers will purchase other products at the same time that are considerably more profitable. Loss leader pricing is the practice of selling a small number of products either at or below cost.

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