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[source](https://opportunitymarketing.co.uk/blog/why-black-friday-may-not-be-the-best-marketing-promotion)




Black Friday is a funny date that never meant much around the world until fairly recently. Black Friday was always the first Friday after Thanks giving for the US, but for everyone else they had no special discount shopping days until after Christmas. The January sales were when shoppers could find deals and definitely not before Christmas.

 <center><img src="https://i.imgur.com/jCAE3K2.jpg"/></center>

[source]( https://www.aboutamazon.com/news/operations/doug-herrington-amazon-prime-delivery-speed)

In 2010 Amazon was the catalyst that took this shopping idea world wide and retailers had to counter this discounted online shopping threat by joining in. There was a huge risk that shoppers could get most of their present shopping done via Amazon leaving the bricks and mortar retailers sitting with excessive unsold stock.

Back in the 1960's the name Black Friday was seen as it was the first day of the week that the retailers went out of the red and into the black meaning they were now turning a profit. That has obviously changed as retail has moved on not only online, but there are many other factors involved with the main factor being logistics. Black Friday is driven by the needs of logistics today and I will explain why.

Buying from China is done months in advance and the likes of Christmas decorations the orders are already placed in January when the manufacturers have their trade fairs around the world with the main one being in Germany. Every other product that hits the Christmas shelves is ordered 6-8 months in advance and why buyers have planners. When the Christmas stock arrive if it is not in the warehouse by the first week of December the chances are it will only reach the stores in January. The logistics schedule is that tight especially for bricks and mortar operations. I can recall a few years back one retailer having just on 500 containers sitting in storage being charged daily demurrage fees that had missed the Christmas deadline. 

Logistics is the reason why Black Friday plays such an important role in Black Friday due to China being the global manufacturing hub since the 1980"s. In the 1960's and 70's most of what was bought was made locally so manufacturers would be the supplier and also the warehouse with retailers not having to hold huge volumes of stock.


# Out With the Old And In With The New

Black Friday is the trigger date for new stock arriving in the various countries around the world that will be available for Christmas. Black Friday is the catalyst to make room in the warehouses for the latest up to date models the brands have on offer. Without a Black Friday this would be impossible to achieve as the retailers need to clear their stores of any dated products and why there are heavy discounts for those particular items. Technology moves at such a rapid pace any electrical product would have received upgrades within the last 12 months.

Warehousing operates like a shoe horn where the flow comes in one side and exits the other and if there is no space available no new stock can enter and you have a standstill. The same applies to retail because they have limited storage space and need to clear what they have in order to accept the new Christmas stock. 

Black Friday has definitely become an important tool for retailers to reset their stock holdings and balance out whatever they have that has being moving slower than expected and discounted prices do that for them. Even at cost the retailer is making money as their cost has built in fees covering all the hidden costs (rebates) including a small percentage as profit. Walmart's department that handles this is the most profitable section of the entire company out earning all the stores combined. This formula guarantees the group a profit even if the item sells at cost which could be 65% off retail. Divide by 3 and you will not be far off cost pricing when dealing with electronic items.

Posted Using [InLeo Alpha](https://inleo.io/@cryptoandcoffee/black-friday-how-it-has-evolved-and-why)