You can practically feel the stress levels rising as shoppers mentally prepare themselves for the frenzied sales shopping event happening this weekend, Black Friday. Although let’s be honest, ‘Black Week’ would now be a more appropriate name, as retailers compete to extend the sales period and start their promotions before competitors.
But when we think about it – are these so called Black Friday ‘bargains’ all they’re cracked up to be?
Sale periods are traditionally a time for retailers to get rid of stock that isn’t selling, to make room for next season’s new products. Black Friday however comes at a peak selling time, right in the middle of ‘the golden quarter’ as shoppers frantically buy for Christmas. So how come retailers are able to make such drastic reductions and not have to give the store away too?
The answer is simple: mark-ups. And high ones at that.
When we started MADE.COM we saw that the average price difference between retail price and production cost could be anything from three times or up to 12 times higher than it should be.
While sometimes, there are genuine bargains to be had, Black Friday, Cyber Monday and other major sale periods should serve as a reminder to consumers that most retailers’ margins are simply too high to begin with, and customers are not getting a fair deal.
Of course, increasing numbers of retailers can’t compete with this discount culture, as they - fairly - keep their margins low to begin with so their products are genuinely affordable. Huge reductions on already low prices could, quite simply, put their business in danger.
Like us at MADE.COM for instance: our prices are kept as low as possible because we’ve streamlined any processes that add on cost. So vast warehouses, agents, importers and immense shops are all out. We admire fashion brands like Everlane, another business that connects the consumer directly to manufacturers, which has previously closed its site down on Black Friday in protest.
Instead of offering promotional deals for a couple of days, we have built fair pricing in to our business model 365 days of the year. We want to show that there is another way to sell great products, which doesn’t lead to customers being ripped off.
By Ning Li
This story originally appeared on the Evening Standard website: MADE.COM Boss: Why shoppers should be wary of Black Friday 'deals'