Losing money, it seems, is a great business model. In 2011, it was reported that Amazon lost $11 per customer on the annual shipping charges incurred by each Amazon Prime subscriber. For that matter, Amazon has famously lost money for much of its existence through exceptionally low prices, fast and (often) free shipping, and constantly expanding the business into new spheres. Yet experiments like Prime, which has come to be seen as a huge, all-powerful moneymaker, have paid off handsomely: The e-retailer is now worth more than Walmart.
Naturally, the cult of Amazon and its lose-money-to-make-money model has inspired legions of followers. As New York Times columnist Farhad Manjoo put it, “giving away real money is a key part of business” for startups like Jet.com, which is using hundreds of millions of dollars in funding to defray the costs involved with marketing a new business and offering the lowest prices on the web.
Of course, one hopes the plan isn’t to simply keep losing money indefinitely. The long-term goal of losing money is to make money by attracting bajillions of customers and perhaps easing back a bit on the discounts once a critical mass has been converted as fans of the company.
At least in the early days, when these businesses are desperate to attract new customers and the discounts remain extraordinary, “consumers could be in for a boon,” according to Manjoo. “After all, from the perspective of customers, what’s so bad about companies giving away their venture-funneled cash?”
We’re certainly not going to complain. Here are five businesses that’ll essentially pass along some of their funding cash to you, in the form of cheap prices on goods and services, so long as you become a customer.