Science behind Black Friday

Black Friday has become the holiday after the Thanksgiving holiday. Driven by massive sales in nearly all retail store, consumers have cut their holiday of giving thanks short. Ironically they cut the thankful holiday short in order to get greedy in retail stores around the country. How are these companies able to offer such discounted prices year after year and still make a profit?
This diagram demonstrates how a typically company will operate on black friday:

As you can see the retailer will typically sell the product for double the money they paid for it. On black friday they will sell it for 1.5 times the money they paid for it instead of double. By doing this they end up selling almost 5 times more of the inventory which generates over double the amount of profit. So next Friday when you are out black friday shopping, ask yourself if you are really getting the deal you think you're getting. Chances are most marketing departments in companies won't set prices to match cost or lost money therefore they are still making a profit on your purchase.



Works Cited:
"Black Friday By The Numbers - The Accounting Degree Review." The Accounting Degree Review. N.p., n.d. Web. 17 Nov. 2015.