How a Loss Leader Can Improve Your Side Hustle

how a loss leader can improve your side hustle

When I was growing up there was a store called “Stereo Discount Center” on the East Side of Providence.

They had a wide range of speakers, receivers, amps, record players, TVs and accessories like Monster Cable, etc.1

Stereo Discount had a special room for the super high-end stuff.

They kept the fancy McIntosh amps and slick Nakamichi Dragon Decks in there… Sometimes I would go in the high-end room just to press the “open/close” button on the Nakamichi over and over to watch it flip the cassettes.

At the other end of the spectrum was crap items like blank tapes and CDs.

One of the guys who worked at Stereo Discount told me the tapes and CDs were the “loss leaders” they put in the advertising flyer they sent out in the paper every week.

Loss Leaders and Information Products

A loss leader is something you don’t expect to make any money on.

You “sell” a loss leader for cost, or even for less than what you paid for it… Just to get traffic in the door.

The benefits of the loss leaders come from the upsell opportunities.

Loss leaders were, and are, actually a great marketing tactic.

The even better news is that on the Internet, loss leaders are free…

And they work like a charm.

It’s no secret that information products can be a fantastic side hustle… Because if you can sell products that are comprised of digital 1s and 0s as an online business, you’ve got it made.

With information products not only is there no cost of goods sold for each product.

So you can give away parts of your products for free as “loss leaders” and not actually incur a loss while doing so.

What’s Your Information Product Side Hustle?

If you don’t already have a side hustle, you should start one. Starting a blog or an online business is easy.

You probably have some expertise that’s been built up over the years. And this is probably expertise that people would pay for.

If you write an e-book, you can give away a free chapter or two.

Or maybe you are a teacher and can develop an online course. You can offer the first module for free and then upsell the full course.

Exam preparation and continuing education are other great online business niches with loss leader angles.

In the former, you can offer a partial free exam and upsell for the full ones.

Or with online CE you can offer a free course that only fulfills a portion of the required continuing education hours needed.

Benefits of Loss Leaders

In all cases, loss leaders provide two benefits:

  1. They give your customers a low friction way to try before they buy.
  2. They allow you to test your ideas in an easy, but very “real world” way.

The steps are easy to do this:

  1. Create a great product.
  2. Give a portion of it away for free.
  3. Collect an email, and/or other information, in exchange for the free product.
  4. Define your key performance metrics.
  5. Monitor your conversion ratios.
  6. Get feedback.
  7. Make improvements.
  8. Re-test.
  9. Repeat.

Email automation services like Mailchimp or ConvertKit make the process of testing loss leaders easy. You can create a free Mailchimp account, offer your product and collect the email.

Then identify your metrics (like signups, email opens, clicks or actual sales, etc.). Then monitoring your campaigns.

As a next step you can start testing things like automations.

Automations allow you to communicate with your audience in response to certain triggers or behaviors. An example would be, offering a customer a new product after he or she has already purchased the first one.

The beauty of it is that a loss leader system can be put in place and operating independently, with little incremental effort after the initial work is done.



  1. Stereo Discount has moved now, but apparently they’re still around.