This Black Friday, almost every business is slashing profit margins by 50%, 60%, or even 70%, expecting higher revenue returns and increased sales. This sounds like a solid strategy since everyone seems to be doing it. When you see competitors offering massive discounts, staying out might feel risky. Like you’re being left behind.
But the reality is that not every business is positioned to cut prices so drastically. Following this trend blindly could seriously damage your business.
The Math That Doesn’t Math
Let’s look at a simple example.
Suppose you purchase a product for $200 and typically sell it for $300, making a 50% profit margin. Now, caught up in the Black Friday frenzy, you slash the price down to $200 just to make a sale.
What happens?
You’ve completely eliminated your profit. You’re now chasing sales volume at the expense of sustainability, potentially killing your business while everyone else celebrates their “successful” Black Friday.
Some businesses operate with profit margins as high as 95%. If you’re not in such a position, you absolutely shouldn’t aim for those dramatic 80% discounts or go profitless altogether. Your business model is different, and your Black Friday strategy should reflect that reality.
The Service Business Industry Case
This challenge becomes even more complex for service-based businesses. When Black Friday arrives and your Instagram feed floods with posts screaming “90% OFF!” the pressure to match these deals becomes overwhelming.
The temptation to join the discount bandwagon is huge, but here’s what nobody often talks about. When you price your services extremely low, you risk damaging how customers perceive your quality.
Pricing isn’t just about numbers. It’s about perception.
Going too low doesn’t just affect your immediate revenue. It fundamentally changes how potential clients view your value. A service priced at 90% off can trigger doubts: “If this is so cheap, is it really any good?” You might win a sale today, but you could lose credibility and long-term customers tomorrow.
The real deal to navigating Black Friday successfully isn’t about matching every competitor’s discount or sitting completely still while the market moves. It’s more about finding your unique balance. You need to offer enough appeal to participate in the trend and attract customers.
But do not go so low that you compromise your product or service perception.
Before setting your Black Friday prices, ask yourself: What discount can I offer that attracts customers without devaluing my brand?
What margin keeps me profitable while remaining competitive?
Remember, you’re building a sustainable business, not just chasing a single day’s sales figures.
This Black Friday, resist the urge to simply follow what everyone else is doing. Instead, create a strategy that works for your specific business model, protects your brand perception, and maintains your profitability.
Because at the end of the day, a business that survives Black Friday is better than one that sacrifices everything for it.