Q&A segment from a Capitalism.com YouTube episode ("Sell Low Now... Then Dominate the Market | #FFLTV Ep 19 QA") in which Alan Perlmuter asks whether selling no‑margin products alongside high‑margin products is acceptable to boost recognition. Ryan Daniel Moran answers that it can be a strong strategy when used as a "tripwire" to acquire customers and then lead them into higher‑margin offerings, warning that selling only commodity low‑margin products is risky. He illustrates the idea with a spatula/moms example and a memorable aphorism about "whoever is willing to lose money the longest usually wins."
Chapters
Alan Perlmuter asks, is it okay to sell products with no profit margin along with highly profitable products in order to boost recognition?
Okay to go in a completely different direction? Is it okay to sell low margin products alongside high margin products to boost brand recognition? Absolutely. In fact, there's this quote that I like that I might have made up. So we'll give credit to Ryan Daniel Moran for saying he who is willing to lose money the longest usually wins in the marketplace. What I mean by that is the longer you can delay the profit or make it deeper in your customer funnel, the more money you will ultimately make. Because there's this term that digital marketer kind of coined of the tripwire of what is the product that everybody wants and they're usually buying on price. That if you were able to eliminate all profit margin and just sell on the marketplace to get customers now flowing to your other higher margin products, what would be that in your customer experience? I think that is a great thing for most business owners to consider. The thing that I find dangerous or really short sighted in most people's businesses is they just look at a marketplace, they say, what are people buying? Let's sell that and let's just do it cheaper. Because then we just have price wars and things falling. But if you want to have a piece of your overall product portfolio and dedicated to just getting as many customers as possible, go for it and then lead them into your higher profit products. I think, I think that is the fastest way to grow a company because you get the most customers. Now most people who are out there selling physical products are just selling products rather than serving people. The difference here is if you're just selling spatulas, as my classic example, then you've gotta sell low margin products and make $2 a spatula over and over and over and over again. And the minute somebody moves in and sells a spatula for less than you, you're screwed and you're out of business. Whereas if you serve moms, you have 1,000 products that you can sell that demographic. So spatulas could be a no margin product that you sell just to get in front of more moms so they come in and they buy more stuff and by doing so you get more moms, which ultimately build your business because they're gonna buy spatulas and they're gonna buy food and they're gonna buy all kinds of things. So if you have higher margin products, and you should, then I think it's a totally good strategy to sell low margin products to get more customers in the danger is in if you're just selling commodities, if you're just selling low margin products, that is a really hard way to build a business.
