Ugh, today is the worst day in shopping. Having worked for a major retailer in college and dealing with the Black Friday fiasco firsthand, I know enough to stay away from the hoards of fools that will be chasing the ridiculous deals they will be showcasing.
Most people think that Black Friday stands for the time of year when companies go from being in the red to in the black. This is incorrect for two reasons. First of all, retailers do not rely simply on Christmas shopping for profit. Sure it’s a significant portion of revenues, but if you were in the red before Christmas shopping, you will probably still be in the red after. Black Friday, as a term, originated in Philadelphia in the 60s to refer to the traffic associated with the biggest shopping day of the year.
you know how Black Friday works. Retailers distribute ads in Thanksgiving newspapers of crazy deals. You have to arrive sometimes between 3:00 AM and 6:00 AM to take advantage of the specials. They’re often called “doorbusters”. These sales are so cheap, the companies are either losing money or making practically nothing on every sale. So why not just avoid the sales altogether?
These sales are known as “loss leaders”. They are designed to get your attention and get you into the store. The companies expect to lose money on these specific items but they know you are going to buy more than just what they listed in their ads. You may go to Best Buy for that 32 inch TV, but you’ll leave with it, a DVD player, movies, two video games, and a Coke. Video games are actually the perfect example of loss leaders. With the exception of Nintendo’s Wii, video game consoles are the perfect example of loss leaders. Sony sells their Playstation at a loss or at cost, and makes it back on accessories and video games.
So you can beat the system if you just get the item on sale right? Not quite. Odds are you’ll have your eyes set on one item and when you get to the store it’s sold out. These items are often in VERY limited quantities. I’m talking like TWO of something. But you’re already at the store with a shopping list so you’re going to buy everything else you had to buy that day.
One way or another, they will get money out of you. Me? I’ll be doing other things today. Chasing deals isn’t worth my time. Just make sure you don’t spend all your money Friday, you can’t forget about cyber Monday.
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
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