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What is Dumping?

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Dumping is the practice of selling a product or service in a foreign market lower than an established "normal price." This is typically done to establish a monopoly or put a competitive threat out of business. Dumping can also involve cronyism whereby a nation or organization may lose money on the strategy but individuals may become enriched by it.

Normal Price

A normal price can refer to a typical "fair value" in a nation over a period of time. The prices charged by a firm in their domestic market and other international markets are also considerations.

Government Support

Dumping isn't necessarily barred by trade agreements but it is viewed negatively. In many cases, a government or trade organization will take action against dumping if it is damaging the industry of a nation. Dumping is particularly damaging if it is supported by a government with payments such as subsidies.


A firm sells widgets for $2 in their own market and $1.80 in most international markets. Their strongest competition is in Germany where they sell the widgets for $0.30. It is likely this price is aimed at damaging competitors in Germany as opposed to being viewed as a fair value for the product.


Foreign firms may be accused of dumping simply because domestic firms can't compete with their prices. This can be viewed as a type of protectionism whereby dumping is used as an excuse to protect firms that can't match the costs of the foreign competition.
Overview: Dumping
The practice of selling a product or service in a foreign market lower than an established "normal price."
Related Concepts


This is the complete list of articles we have written about pricing.
Algorithmic Pricing
Bargaining Power
Benchmark Price
Price Fixing
Cost-plus Pricing
Price Gouging
Customary Pricing
Decoy Effect
Everyday Low Price
Marginal Utility
Willingness To Pay
Dynamic Pricing
High-Low Pricing
Market Value
Flat Pricing
Loss Leader
Predatory Pricing
Price Discrimination
Snob Effect
Market Price
Price Competition
Price Leadership
Premium Pricing
Price Economics
Price War
Revenue Management
Veblen Goods
Price Floor
Price Promotion
Price Sensitivity
Price Skimming
Price Umbrella
Pricing Power
Pricing Strategy
Sticky Prices
Value For Money
More ...
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