How retailers get rich off Black Friday

Every year on the day after Thanksgiving, millions of Americans get up early- some camping out overnight- to try to get the best deals at the start of the holiday shopping season. And every year, retail outlets make billions and billions of dollars in profits on Black Friday alone. However, stores often aren't actually lowering prices, but raising them, which leads to the question: 'Why do consumers still shop so much on Black Friday?"

One of the main answers is tradition. For many people, shopping during the Friday after Thanksgiving has been a lifelong tradition, and they see no reason to stop. In my family, all the women go shopping of Black Friday, and they have been for decades. For others, the long weekend is often the only time they have to shop for presents, as December can be an extremely hectic month.

Because of these reasons, all retailers need to do is convince the general public that their sales are greater than anywhere else, since they are virtually guaranteed a viable stream of potential consumers. Many companies do this by offering limited sales: they will heavily advertise a ridiculously low price on an expensive item, but there will only be 5 or 10 at the sale price per store. Yet other companies will offer sales at times when many aren't even up: some companies offer 10% off deals from 4AM-8AM. Still other retailers offer great deals on certain items, but significantly raise the prices on the item's compliment. Yet other stores raise prices way up during the week before Thanksgiving, just so everything in the store can be a certain percent off on Black Friday, even though it is often much higher than the average yearly price. But whatever gimmick retailers decide to use, they certainly rake in the cash of Black Friday every year.

The G20 summit in South Korea

Currently, President Obama is attending a summit in Seoul to discuss trade regulations with South Korea and other countries. Unfortunately, he doesn't seem to be doing much more than making an appearance. Once again, president Obama has appeared to have failed to get any further regarding relations with other countries, which has placed the US in a state of gridlock. Each meeting, all the president ever does is agree that China, Iran, and North Korea are enemies that need to be regulated. However, the president never actually gets around to forming new trade agreements with allies.

If president Obama could actually reach an agreement, it would greatly help our country. Creating free trade agreements to lower prices, regulating the Chinese Yuan, or increasing exports to Asian countries are all items that the president could accomplish to help American citizens. But if he continues to fail to back up his talk with actions, it won't be helping America.

http://www.usatoday.com/news/world/2010-11-12-obamatrip12_ST_N.htm?csp=34news

Purpose of this blog

Hello to all that may be reading this. This blog is designed to be an economics blog with stories directly from the financial world. It will be updated biweekly. Enjoy!