When to “Buy the Business”: Strategic Aggressive Pricing to Close Deals

In the cutthroat arena of sales, “buying the business”—offering products or services at aggressively low prices, sometimes at or below cost—is often misinterpreted as a desperate move. However, when executed strategically, it can be a powerful tool for long-term growth rather than a short-term fix. This approach, known as penetration pricing or loss-leading, involves sacrificing immediate margins to secure deals that pave the way for future profitability. Far from desperation, it’s a calculated decision in specific scenarios. This article explores key circumstances where buying the business makes sense, including entering new markets, securing high-value clients, fending off rivals, supporting noble causes, and banking on scalability.

Establishing a Foothold in New Products or Markets

One of the most common reasons to price aggressively is to break into a new product line or market segment. By offering introductory deals at low or no profit, you lower barriers for customers to try your offering, building awareness and loyalty quickly. This strategy helps gather market data, refine your product, and establish a customer base that can lead to upselling later.

For instance, when a streaming service like Netflix entered the market, it priced subscriptions far below competitors like traditional cable providers. This attracted millions of users accustomed to higher costs, allowing the company to dominate the space and gradually increase prices as content libraries expanded. Similarly, ride-sharing apps like Uber used deep discounts on initial rides to enter urban markets, drawing users away from taxis and creating network effects that made the platform indispensable. In these cases, the initial “loss” was an investment in market share, turning newcomers into industry leaders.

Securing Clients with Overall Attractive Economics

Not every deal needs to be profitable in isolation; sometimes, the bigger picture justifies buying the business. If a client promises long-term value through repeat purchases, cross-selling opportunities, or high-volume orders, aggressive pricing on the first deal can lock them in. View the relationship holistically—low margins now could yield substantial returns over time.

Consider printer manufacturers like HP, who sell printers at slim margins or even losses, knowing customers will buy high-margin ink cartridges repeatedly. This creates a recurring revenue stream that far outweighs the initial sacrifice. In B2B services, a consulting firm might underprice an entry-level project for a large corporation, anticipating expansions into more lucrative contracts. The key is evaluating the client’s lifetime value, ensuring the economics balance out favorably.

Staving Off Competition

Aggressive pricing can be a defensive play to protect your turf or deter rivals from gaining ground. By undercutting competitors on key deals, you maintain market dominance and force them to respond, potentially weakening their position. This is particularly effective in saturated markets where loyalty is fluid.

Walmart exemplifies this by using everyday low prices on staple items to draw shoppers, making it hard for smaller retailers to compete. In tech, Amazon has priced cloud services aggressively to capture market share from established players, using scale to offer unbeatable deals. The goal isn’t endless price wars but strategic strikes that reinforce your position, allowing you to raise prices once competitors retreat or your value becomes undeniable.

Charitable or Humanitarian Concerns

Sometimes, buying the business aligns with broader ethical goals, such as supporting underserved communities or advancing social causes. Pricing at cost or below can build goodwill, enhance your brand’s reputation, and open doors to partnerships or government contracts. This isn’t purely altruistic— it often leads to positive publicity and long-term loyalty.

For example, pharmaceutical companies occasionally offer drugs at reduced prices in developing regions to combat health crises, fostering global brand trust that benefits premium markets elsewhere. In consumer goods, brands like TOMS have used “buy one, give one” models, effectively subsidizing donations through sales, which resonates with socially conscious buyers and drives volume. Here, the “loss” is offset by enhanced brand equity and customer advocacy.

Expecting Scaling to Expand Future Profitability

When scalability is on the horizon, aggressive pricing can accelerate growth, leading to economies of scale that turn losses into profits. This works best for digital products or services with low marginal costs, where acquiring users cheaply upfront allows for monetization through expansions or ads.

Spotify used low introductory rates to amass a massive user base, then converted many to premium subscriptions as its library grew. In software, companies like Zoom offered free tiers during rapid adoption phases, betting on viral growth to convert users to paid plans. The strategy hinges on a clear path to profitability—once fixed costs are covered by volume, margins soar.

Conclusion: A Strategic Tool, Not a Last Resort

Buying the business through aggressive pricing is a bold strategy that, when applied judiciously, can propel your company forward. Whether entering new territories, securing holistic client value, defending against competitors, advancing humanitarian goals, or scaling for future gains, it’s about investing in tomorrow’s success today. The key is rigorous analysis: Calculate the potential ROI, monitor outcomes, and avoid over-reliance to prevent eroding your brand’s perceived value. Done right, this approach doesn’t just close deals—it builds empires