Friday, November 25, 2016

Black Friday

In business, black means good, as in black ink, positive balance, as opposed to red ink, negative balance.  The day after Thanksgiving in USA is called Black Friday because for many retailers it was the day they turned from a negative balance to a positive balance. the cash registers running red hot.

Mish has a post on how all this is changing, with the obligatory hype regarding internet "sales."

I call it hype, since predictions, that never quite pan out in the future, are presented as earth shattering, and never do the analysts report the two salient factors:

1. What is the net profit of the Black Friday sales? If the draw is loss-leaders, then what is the net?  For all of the extra overhead, what money do you get that you would have not gotten otherwise?

2. When will they report internet sales net of returns?  Never.

How important is Black Friday?  Let's look at an authentic larger retailer, whose model has thrived for over 80 years, through thick and thin.  It is a sporting goods store, thriving while the likes of dinosaur Sports Authority has come and gone in a fraction of that time frame.

Such is the effect of ex nihilo credit.  Nothing from nothing is nothing.

Like last Black Friday,  this Black Friday REI will be closed.

For authentic retailers, Black Friday does not matter.

Feel free to forward this by email to three of your friends.


Anonymous said...


I thought of your blog article when I saw this recent article in WSJ:

Even though people can stream movies and buy DVD's online, the physical DVD video stores are still here and still have a market.

Manjula Ramesh said...

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