BELOW COST Meaning and
Definition
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Below cost refers to a pricing strategy in which a product or service is sold at a price that is lower than its production or acquisition cost. This term is commonly used in the business context and is often associated with the concept of loss leaders, which are products or services sold at a loss to attract customers or stimulate sales of other profitable items.
When a product is sold below cost, it means that the seller is incurring a financial loss with each unit sold. This pricing strategy can be employed by businesses for various reasons, such as to gain a competitive advantage, increase market share, or drive traffic to their establishment.
Selling below cost can also serve as a short-term tactic to boost cash flow or reduce excess inventory. However, this strategy is typically not sustainable in the long run because continual losses may severely impact profitability and viability of the business.
In some jurisdictions, there might be legal restrictions or regulations on selling below cost to prevent anti-competitive behavior or predatory pricing practices that harm other businesses. It is important for businesses to carefully consider the implications and potential consequences of selling below cost before implementing such pricing strategies.
Common Misspellings for BELOW COST
- velow cost
- nelow cost
- helow cost
- gelow cost
- bwlow cost
- bslow cost
- bdlow cost
- brlow cost
- b4low cost
- b3low cost
- bekow cost
- bepow cost
- beoow cost
- beliw cost
- belkw cost
- bellw cost
- belpw cost
- bel0w cost
- bel9w cost
- beloq cost
- belowcost
Etymology of BELOW COST
The word "below" originated from the Old English word "be-", which means "by, near, or on". The term "cost" comes from the Middle English word "cost", meaning "price or expense". The combination of these words gives rise to the phrase "below cost", which suggests something sold at a price lower than the original production or purchase price.
Similar spelling words for BELOW COST
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