Increase Sales, Go Out of Business

Long ago I heard that phrase from an accountant, who noted most businesses increase sales just before they close down.  What with liquidation sales, this makes sense, but he was talking about the people who cut prices or run gimmicks to bring in more customers, not realizing what it does to the profit margin and profitability.

Online retail sales are still only about 6% of all retail activity, but boom-time big businesses, price cutters, are trying to get a jump on each other by opening early and earlier on the day after Thanksgiving, BlacK Friday.  How being open more hours with more overhead to sell products at lower prices helps a business, I do not know.  If I was in charge in these times, I would be closed Sundays, and no doubt have the same amount of sales at 1/7th reduction in cost.  If you have what people want, they will arrange to be there when you are open.

At a Halloween party I listened as two 40+year employees of a major department store chain talk about how the entire loss prevention team was laid off.  They estimated it was about a million a year in savings for the one store they worked in, and guess that any increase in theft was less than that.  Now this may be temporary, as many companies lay off well paid crews and then rehire replacements at minimum wage.  In any event, according to the salesperson, stuff is disappearing fast, and it is provoking since their commissions are based on sales and if the good stuff is gone they cannot do better than minimum wage.  Obviously the thieves have figured it out.  I wonder if the loss prevention crew laid off contacted past arrestees to notify them the store is wide open, with a view if the losses are too dear they will get rehired?  Who knows, but perhaps eBay will have the best selection of new garments this Christmas season.

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