I voted you up, but I don't think so. Some worthwhile pieces to read and contrast -- Loss leaders (common to almost all retailers): http://en.wikipedia.org/wi

I voted you up, but I don't think so. Some worthwhile pieces to read and contrast -- Loss leaders (common to almost all retailers): http://en.wikipedia.org/wiki/Loss_leader http://en.wikipedia.org/wiki/Loss_leader The razor-and-blades business model, made famous by Gillette: http://en.wikipedia.org/wiki/Freebie_marketing http://en.wikipedia.org/wiki/Freebie_marketing Compare that to predatory pricing -- http://en.wikipedia.org/wiki/Predatory_pricing http://en.wikipedia.org/wiki/Predatory_pricing Predatory pricing is most possible when a large profit systems-based company can run a loss in one area to destroy competitors to the system. For instance, British Airway cutting rates on a New York <-> London flight to very cheap if a new carrier emerges to challenge them, even losing money on the route while having the rest of the airline subsidize them. It'd be possible in air travel, because the gains are potentially huge. Airline seats are incredibly perishable, so the additional revenue from flying with a more full plane is very worth running short-term losses to get, and by keeping the general route fares high it could help them a lot. Also, because there's limited airline landing slots, they won't necessarily face constant competition -- if the competitor goes bust and someone like BA can buy their airport slots, they've further entrenched their position against future challengers in multiple ways -- they've got the landing slots, and financiers saw the previous company go bust, making it more difficult to get capital. How does that differ from razors-and-blades or loss leading? I think it comes down to intent. Discounting, taking no gain, or even a small loss to win a consumer's attention and business seems worthy, especially when developing new markets. Discounting strictly to destroy competition, with the intent of raising prices very quickly after the competition goes bust -- that's more out of line. A quick acid test might be, "Would this be a viably pursued strategy if there was no competition?" And with legitimate loss-leading, you could say yes. Someone will go to a liquor store more off if there's a cheap decent beer or wine on sale, regardless of competition in the area. People would potentially buy more disposable razors if the initial package of working razor comes in at a cheap price point, so it's easy for new people to try it out. Likewise, the Kindle. All of these strategies establish market positions and gain market share, which is obviously somewhat to the potential detriment of would-be competitors (...well, unless it grows the market more than grabs market share...) -- but loss leading or razors-and-blades seems to focus more on attracting the consumer than bankrupting the competition.