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Is there an expression in English for what someone does if he/she charges well below the market rate for a product or a service?

Here in Israel we call it "breaking the market" - a practiced shunned by practically everyone offering that product or service, since it may devalue the product/service.

  • In the US, it is called competition. When parties agree either expressly or tacitly not to undercut each other or take steps to prevent others from undercutting them, it may lead to racketeering to collude in non-competitiveness, which is a federal offence, except in cases when undercutting is a predatory pricing strategy to eliminate competitors before charging higher prices again. – Blessed Geek May 20 '14 at 5:32
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undersell
ʌndəˈsɛl/
verb
verb: undersell; 3rd person present: undersells; past tense: undersold; past participle: undersold; gerund or present participle: underselling; verb: under-sell; 3rd person present: under-sells; past tense: under-sold; past participle: under-sold; gerund or present participle: under-selling

    sell something at a lower price than (a competitor).
    "we can equal or undersell mail order"

or we can say

undercut

oxford:

  1. Offer goods or services at a lower price than (a competitor): these industries have been undercut by more efficient foreign producers
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  • Does undersell have a neutral or a negative connotation? – Ilanysong May 19 '14 at 15:09
  • in this context it is neutral - but it can become negative if you use it to mean "promote or value (something) insufficiently". – Mo. May 19 '14 at 15:11
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I think that predatory pricing is the most effective expression for what you are looking for:

'Predatory pricing (also undercutting) is a pricing strategy where a product or service is set at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. If competitors or potential competitors cannot sustain equal or lower prices without losing money, they go out of business or choose not to enter the business. The predatory merchant then has fewer competitors or is even a de facto monopoly.'

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    I really like this suggestion- specifically because it has such sinister undertones, accurately reflecting the feelings of those in the business. Thanks! – Ilanysong Jun 3 '14 at 7:30
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Consider undercut.

undercut: to offer goods or services at a lower price or rate than

Alternately, you can say "sell at rock bottom (or giveaway) prices" and "slash prices."

slash: to retail or reduce drastically: slash prices for a clearance sale.

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Undercharging by a "normal" amount is called undercutting or underselling. That's usually legal.

However, if there is an intent to drive competitors out of business, and the discounted prices are made possible by profits or subsidies from another country, that could be considered illegal, and it may be cause for national or international authorities to intervene. The term for that is dumping. That seems to be closer to what you mean by "breaking the market".

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  • Hmmm... all of the online references I've checked (wikipedia, investopedia, about.com...) define "dumping" as the practice of selling a product overseas for a price that is lower than the price it is sold at in the domestic market... it's similar to undercutting, but I don't think the meaning is the same... – Ilanysong May 19 '14 at 16:44
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Undercutting - to offer to sell things or work for a lower cost than (another person or company)

I guess this can be used in any context and often carries a negative connotation...

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