Posted: 2018-11-23 15:42:56
Edited: 2018-11-23 15:46:01
Dude, from being in retail for decades and doing this stuff, I have to say you have it all wrong. In retail, you're not giving away money with this, otherwise they would never do it. This is exactly how we make money. More than 50% off our annual profit comes from this type of special and Christmas. We HAVE to make that 50% in the silly 3 months or you're dead in the water and the company will sink.
It's simple economics. We sell a lot more product for a lot less margin resulting in more profit overall. Selling 2 products in a month at R50 profit is only R100 while we still pay the full months rent, storage, staff, electricity, water, security, etc. Selling 5000 at R10 is R50,000. That's how it works. Simple as that.
Even the manufacturers get in on it and negotiate to provide bigger volumes at way lower prices and it continues down the chain and they all make more money. You think it's one day they taking a hit but they planning that one day at least 6 months to years in advance typically to make MORE money. They is NO EMOTION while the customers get very excited amd happy from the retailer to "give back" or "celebrate" or whatever. It is purely for COMMERCIAL GAIN, all financial to make more money
That's my retail input since you made some assumptions there.
Not sure how it's panning out in this industry. I punted this morning without any thought to Black Friday. Paid normal price to a regular, got great service from her as I normally do. Then again, I feel like I scored Black Friday every time I see her, lol