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Black Friday Explained



Do you know the origin of Black Friday?  It’s the retailers trying to get out of the red.  In accounting terms, being in the ‘red’ means you have a negative balance, or a negative cash flow.  Being in the ‘black’ means you have a positive balance, or a positive cash flow. 
Retailers seemingly mark down the prices on their big-ticket items, like cell phones, flat screen TV’s or other technology, to entice you to purchase them so that they can end the year in the black.  Especially if their 3rd quarter sales were not that great.    Not a bad idea, but is that really your problem? 
Consider this, according to an article by Aaron Tilly a former staff member of Apple in Forbes magazine, the average cost to make an Apple watch was $89.70 in 2017.  This same watch is sold for anywhere from $350 to over $900.  That’s a 25% to a 98% mark up or more.   Considering technology changes rapidly, this can get expensive.  Or take an iPhone –
Here is a breakdown of the cost to manufacture an iPhone.

So what does this all mean to you?  When you think about Black Friday shopping, remember, the retailers are protecting their bottom line, and not your pocketbook!








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