A handful of items each sale event are priced far below anything the rest of the range approaches. Those offers do a job that has little to do with their own margin.
The offer is bought like advertising
A retailer choosing between a television campaign and a deeply discounted item is comparing two ways to spend the same money to bring people into a store.
The discounted item has an advantage: it converts directly. A shopper who came for the offer is already in the building with a purchase intention formed.
The cost is bounded because quantities are limited. Unlike a general price cut, the total exposure is known in advance from the units allocated to the promotion.
Quantity limits define the whole mechanism
Limited stock is what allows a price below cost to exist at all. Without a cap, demand at that price would be effectively unlimited.
Federal advertising rules require that advertised goods be available in reasonable quantity or that limitations be disclosed, which is why per-store availability language appears in the fine print.
Scarcity also produces the queue, and the queue produces coverage. The line outside a store is itself part of what the promotion buys.
The basket carries the economics
Retailers measure these events on total transaction value, not on the promoted item. A shopper who came for one thing and left with several has made the event work.
Store layout during such events is built around that arithmetic. High-margin accessories, warranties and consumables are positioned along the route to the promoted merchandise.
Online, the same role is filled by frequently-bought-together modules and by threshold offers that reward adding items to reach a qualifying amount.
Manufacturers usually share the cost
Deep promotions are rarely funded by the retailer alone. Manufacturers contribute through promotional allowances, rebates and co-operative advertising funds negotiated well ahead of the event.
That support is why particular brands appear in doorbuster slots repeatedly. The slot goes to whoever will fund it, not necessarily to the strongest product.
Specifications are frequently adjusted for these units as well, since a manufacturer can supply a promotional configuration rather than discount its standard one.
The format has migrated online
Physical queues have largely been replaced by timed digital releases, waiting rooms and quantity limits enforced per account rather than per person in line.
The scarcity is now created by a countdown and an inventory counter, which produces the same urgency without the operational burden of crowd control.
What has not changed is the purpose. A small number of items are sold at a loss so that a much larger number are sold at their ordinary price alongside them.