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It means selling a product that doesn't do anywhere near what it's advertised as doing (what the customer thinks it will do) if at all.

 

It's shorthand for 'Marketing bullshit', and the name originated from bogus health products like 'Tommy's Elixir of Eternal Life'.

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Snake oil is an expression that originally referred to fraudulent health products or unproven medicine but has come to refer to any product with questionable or unverifiable quality or benefit. By extension, a snake oil salesman is someone who knowingly sells fraudulent goods or who is himself or herself a fraud, quack, charlatan, and the like.

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