It's not "effectively" losing money. It's losing imaginary money. If you want to see an actual loss leader, go to a grocery story in mid-November. They'll sell

It's not "effectively" losing money. It's losing imaginary money. If you want to see an actual loss leader, go to a grocery story in mid-November. They'll sell you a frozen turkey for (depending on competition) 20 to 50 cents a pound. Wholesale cost will be 80 cents to $1.20 a pound. They take an actual loss on the turkey in order to get you in the store where you will buy three times your usual weekly grocery budget in special holiday foods -- all of which are marked up more than they will be right after Thanksgiving. If selling at less than the market is willing to pay but more than what covers your total costs is a "loss leader", then every sale to attract customers is a "loss leader" and the term has no useful meaning.