A loss leader (also leader) is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services. With this sales promotion/marketing strategy, a "leader" is any popular article, i.e., sold at a low price to attract customers.

One use of a loss leader is to draw customers into a store where they are likely to buy other goods. The vendor expects that the typical customer will purchase other items at the same time as the loss leader and that the profit made on these items will be such that an overall profit is generated for the vendor.

"Loss lead" is an item offered for sale at a reduced price that is intended to "lead" to the subsequent sale of other services or items. The loss leader is offered at a price below its minimum profit margin—not necessarily below cost. The firm tries to maintain a current analysis of its accounts for both the loss lead and the associated items, so it can monitor how well the scheme is doing to avoid an overall net loss.

Marketing academics have shown that retailers should think of both the direct and indirect effect of substantial price promotions when evaluating their impact on profit. To make a very precise analysis one should also include effects over time. Deep price promotions may cause people to bulk-buy (stockpile), which may invalidate the long-term effect of the strategy. This is the association rule analysis.

When automobile dealerships use this practice, they offer at least one vehicle below cost and must disclose all of the features of the vehicle (including the VIN). If the loss-leader vehicle has been sold, the salesperson tries to sell a more upscale trim of that vehicle at a slightly discounted price, as a customer who has missed the loss-leading vehicle is unlikely to find a better deal elsewhere.

Loss leaders can be an important part of companies' marketing and sales strategies, especially during "dumping" campaigns.

Some examples of typical loss leaders include milk, eggs, rice, and other inexpensive items that grocers would not want to sell without the customer making other purchases. While some customers may have the discipline to only buy the loss leaders, the loss leader strategy works because a customer who goes into a grocery store to buy an inexpensive bread or milk item may decide to buy other grocery items.

The Warner/Reprise Loss Leaders were a series of promotional sampler compilation albums released by Warner Bros. Records throughout the 1970s. Each album (usually a 2-record set) contained a wide variety of tracks by artists under contract to Warner Bros. and its subsidiary labels (primarily Reprise Records); often these were singles, B-sides, non-hit album tracks, or otherwise obscure material, all designed to arouse interest in the artists' regular albums. Warner advertised the Loss Leaders albums by inserting special illustrated inner sleeves in all of its regular album releases, listing all of the currently available Loss Leaders and including an order form. Each loss leader double album was priced at US$2, significantly less than a comparable regular-release double album of the time.