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Selling on Amazon with Andy Isom

#334 - The Loss Leader Strategy made one of our clients $1 Million last year

Selling on Amazon with Andy Isom

Andy Isom | Amazon FBA Seller & Agency Founder

Amazon, Business, Amazonfba, Selling, Marketing, Entrepreneurship, Personalbusiness, Productbusiness, Ecommerce, Onlinebusiness

4.9816 Ratings

🗓️ 27 March 2024

⏱️ 24 minutes

🧾️ Download transcript

Summary

The Loss Leader strategy has long been a staple in the playbook of major retailers, with Costco standing out as a prime example. This strategy involves offering a product at a loss to drive high conversions and attract customers. While selling a Loss Leader may result in immediate financial loss, the strategy's effectiveness lies in its ability to draw attention to other products and increase overall sales.

In this episode, we explore how one of our clients implemented the Loss Leader strategy, resulting in $1 million in profits. This case study sheds light on the strategic use of Loss Leader to increase customer engagement and drive revenue growth.

 

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Transcript

Click on a timestamp to play from that location

0:00.0

Guys, the loss leader strategy is not new. A lot of the big time brands, retailers, companies have

0:05.6

been using this strategy for decades. One of my favorite companies to talk about is Costco.

0:11.9

Costco loses millions of dollars every year on Rotissory Chicken, but they make billions of dollars

0:16.9

selling all the other crap, the massage chairs, you know, clothing and all the other stuff that they sell

0:22.6

that you just can't resist buying because, you know, it's Costco and you're like, dang, it's a good deal.

0:26.6

Or, what's up, guys? You're listening to another episode of selling on Amazon with Andy Isam.

0:37.7

The Lost Leader Strategy made one of our clients $1 million last year in profit.

0:45.4

And I'm going to show you guys on screen.

0:48.6

Guys, the Lost Leader Strategy is not new.

0:52.3

A lot of the big time brands, retailers, companies have been using this

0:55.8

strategy for decades. One of my favorite companies to talk about when we talk about the

1:02.0

lost leader strategy is Costco. So for those of you who have a Costco membership or you're

1:08.5

familiar with Costco, you know that Costco has

1:11.4

the famous rotissory chicken, right? It's like, I should know this. I literally bought one this

1:17.4

morning. I think they're $5.99. Correct me if I'm wrong. Hit me up if I'm wrong on that.

1:22.8

But it's something like that. It's like $5.99 for a rotisserie chicken, which is a pretty dang good deal. And if you go to

1:29.3

other grocery stores to try to buy a pre-cooked, like this is already cooked rotissory chicken,

1:34.8

they're charging $10, sometimes even $15 for a chicken, which is probably more along the price

1:39.9

that it should be. But Costco charges $5.99. And they've come out and said that they actually

1:45.8

lose a lot of money on that. They lose money on rotissory chicken. They lose money on eggs, milk,

1:51.8

I think. Their food court, you know, the famous food court, the $1.50 hot dog and drink.

1:56.7

I think they've been losing money on that for a couple decades now because they've kept that

...

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