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Old 10-27-2009, 12:42 AM
SPRINGFIELD SPRINGFIELD is offline
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Join Date: Jul 2006
Location: BURBANK CALIFORNIA
Posts: 731
Loss Leaders

I'm not sure I'm using the right term but here is what I've done.
I've made some small skulls out of cement. It being halloween and all I'm selling them real inexpensive. {IE 50 cents each]
The idea being to lose money on them but to get them out there to generate business contacts.
I walked into an antique store and met lots of resistance ,the owner saying she didn't know the market for such things and so she only purchased two of them. Well next thing you know she
orderd ten more and so far has purchased $50 of my other stuff.

Another person I sold ten to is now picking up six every week and so far hasn't bought anything else. I think she is doing some sort of MLM [multi level marketing] thing. That's a bit of a bummer for me because as I said I'm not realy making any money on them.
I'm planning on developing some unusual cement pot designs and if she doesn't accept them {the pots] than I'm not realy interested in busting my you know what giving her cheep profits.

I would sure like to hear some opinions on this Loss Leader approach of mine.
Is anybody else doing this or is this just a real bad idea.
I'm kind of comparing it to giving out pens wirh your company name on it etc.
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  #2  
Old 10-27-2009, 06:51 AM
mantrid's Avatar
mantrid mantrid is offline
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Join Date: Feb 2009
Location: South Wales
Posts: 590
Re: Loss Leaders

Quote:
Originally Posted by SPRINGFIELD View Post
I'm not sure I'm using the right term but here is what I've done.
I've made some small skulls out of cement. It being halloween and all I'm selling them real inexpensive. {IE 50 cents each]
The idea being to lose money on them but to get them out there to generate business contacts.
I walked into an antique store and met lots of resistance ,the owner saying she didn't know the market for such things and so she only purchased two of them. Well next thing you know she
orderd ten more and so far has purchased $50 of my other stuff.

Another person I sold ten to is now picking up six every week and so far hasn't bought anything else. I think she is doing some sort of MLM [multi level marketing] thing. That's a bit of a bummer for me because as I said I'm not realy making any money on them.
I'm planning on developing some unusual cement pot designs and if she doesn't accept them {the pots] than I'm not realy interested in busting my you know what giving her cheep profits.

I would sure like to hear some opinions on this Loss Leader approach of mine.
Is anybody else doing this or is this just a real bad idea.
I'm kind of comparing it to giving out pens wirh your company name on it etc.
I think its a good approach. However, you need to set a limit on how many you sell at the cheap price to each individual. Otherwise people being people will take advantage. Perhaps its too late to do this this year but next year.

Another approach would be to sell them to the retailers and offer to buy any back that dont sell. This way they cannot loose out and you can store the unsold ones away til next year.
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  #3  
Old 10-27-2009, 07:41 AM
ibmainer ibmainer is offline
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Join Date: Jul 2009
Location: Maine
Posts: 38
Re: Loss Leaders

I would sure like to hear some opinions on this Loss Leader approach of mine.
Is anybody else doing this or is this just a real bad idea.
I'm kind of comparing it to giving out pens wirh your company name on it etc.[/quote]

The idea is a good one as long as long as it has restrictions. Here are few ideas, along with the good one about limiting the number of "cheap" pieces to individuals:
After the customers quota of loss leader has been met, charge the regular price (time cost of materials, labor etc which is what your profit should be);but offer additional discounts to customers who purchase larger quantities of said product (10% off if they purchase X number of skulls)- you decide.
Offer discounts on the skulls for customers who purchase x amount of dollars on other items you have at regular prices (purchase $50 on other items, get X skulls free)
Find out what other items of interest that the individuals who only purchase the skull have, and make them a deal in which you both profit. Say they like a certain other item, tell them if you buy 10 of these, I will give you 5 skulls, etc.
Just a few thoughts. mainers are all about swap and trade, and bargaining.
I once traded organic carrots for a pair of new leather biker boots.
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