Little Buns, Big Lessons: Why I Believed in Loss Leaders Before I Knew What They Were 🥟🧠🍕

The Opening Smear

Let me take you back.

To a time when I was young, impressionable, and — like many Chinese kids — gifted a stack of Chinese idiom books instead of Goosebumps or Captain Underpants. These books had one mission: teach life lessons through stories and phrases that somehow involved war generals, crying tigers, and — in the one story that permanently lodged itself in my brain — steamed buns.

Yes, buns.

In this story, a woman was selling buns on a street flooded with other bun vendors. But while her buns were objectively better (I remember this vividly — they described the bun texture in detail, I was invested), she couldn’t get any customers.

Why? Her price was too high. Her profit margin too fat.

Everyone else was selling cheaper buns, and she was getting roasted in the market.

This is where I met the idiom: 薄利多銷 (báo lì duō xiāo)

Small profit, high volume.

Little me read that and had an absolute epiphany.

I turned to my mum with wild eyes and said, “Wait. What if we sell everything at a loss? Then everyone would buy from us. We’d win!”

My mum cackled.

Then calmly, ruthlessly, as all Chinese mums do, said,

“But then... you wouldn’t make money.”

Plot twist. End of dream. Start of capitalism education.

🐶 Fast-forward to Costco’s $1.50 Hot Dog Combo

When I recently read the Forbes article on the Costco hot dog hedge, it all came back to me.

The buns. The heartbreak. The math.

Costco has kept its iconic hot dog + soda combo at $1.50 since 1985. Not because they’re bad at inflation, but because they’re really, really good at economics. It’s a textbook loss leader:

Selling one item at a loss in order to lure you in — and counting on the fact that you’ll buy other stuff (with juicier margins) while you're there.

It’s the economic equivalent of a baited trap… except the bait is juicy, warm, and served with mustard.

You come for the hot dog. You leave with a 64-pack of toilet paper, a kayak, and a mild existential crisis.

And guess what? Costco still wins.

Because that $1.50 hot dog is doing the heavy lifting — not in profits, but in foot traffic, brand loyalty, and vibes.

Little me was on to something.

She just didn’t have the full spreadsheet.

🎉 Birthday Freebies: The Festive Face of Loss Leaders

And then it hit me again — this same strategy isn’t just found in warehouses and food courts.

It’s hidden in birthday freebies.

Ah yes. My favourite capitalist ritual.

See, I don’t book celebrations on my birthday anymore. Why? Because birthday day is reserved for collecting freebies.

Celebrations? Any other day. But on the actual day? I’m in my scavenger era, phone full of birthday codes and routes mapped like a heist.

There was even a phase where I wanted to build an app to catalogue every birthday freebie — to optimise your route like Pokémon Go but with iced coffees and snack-sized burritos. Unfortunately, this was pre-AI and my only coding skill was yelling at Wix. The dream died.

But the freebies? Oh, they’re still very much alive — and just like Costco’s hot dog, many of them are loss leaders in disguise.

Let me break it down:

• ✅ Genuine freebies – No strings. Big brands just flexing their marketing budget.

• ⚠️ Conditional freebies – Requires prior purchase (e.g. a drink within the last year).

• 🎁 “Free meal” traps – Only free if you bring paying friends. Hmmm.

• 🧾 Discounts masquerading as gifts – $5 off your $50 meal = not that generous.

These "freebies" are designed to do the same thing Costco’s hot dog does:

Lure you in. Get you through the door. Nudge you to spend more while thinking you're getting a deal.

And you know what? Sometimes… it works.

🍕 The Pizza Voucher Showdown (A Case Study)

Let me tell you about one of my finer moments.

Pre-COVID. Birthday season. I got a $25 birthday voucher from a pizza chain.

No minimum spend. No hidden clause. Just… $25 off.

I walked in like a legend and ordered exactly a $25 pizza. No drinks. No sides. No upsells. I came, I claimed, I left. Victory.

But then my mum — sweet, kind, capitalism-soft mum — ordered a drink.

A DRINK.

The highest profit-margin item. The exact thing they want you to order.

Another day where capitalism wins, and I lose moral superiority by association.

But in fairness, most people are like my mum.

They’re not ruthless. Not shameless. Not out here playing mental chess with the menu.

And that, my friends, is exactly why loss leaders work.

🥜 What I’m Spreading on This

Sometimes the “free” thing isn’t free.

Sometimes it’s a story. A lesson. A marketing strategy with a side of mustard.

Loss leaders are powerful — but only if you understand the game.

It’s not about giving stuff away for fun. It’s about betting that a small upfront loss will lead to bigger wins elsewhere — whether in sales, brand love, or making you think a company is the kindest, coolest kid on the block.

So next time you see a hot dog for $1.50 or a birthday meal that feels too good to be true?

Ask yourself: Who’s really winning here?

And then order your free pizza, no drink.

Because the real win? Is knowing when you’re being played.