Black Friday shopping is big business, and as it approaches, you’re probably asking yourself whether or not your E-Commerce business should participate. Before you jump on the bandwagon and feel pressured to launch a Black Friday sale, you should weigh the benefits and costs to decide if it fits your bottom line.
Brands offering online courses, digital-only products, subscriptions, rebill models, or larger brands competing for ad space are better positioned for holiday promotions. Black Friday is a great time to leverage a promotion if you’re a company with holiday-specific inventory, trying to clear seasonal overstock, or overstock that is getting ready to expire.
Service-based businesses and businesses where you have to perform work at a discounted rate without long-term commitment are not advised to participate.
What Factors Should my E-Commerce Company Consider Before Participating in Black Friday or Cyber Monday Deals?
Before you start gearing up for your launch, you’ll need a Black Friday e-commerce strategy. With a compilation of financial considerations for E-Commerce and digital retailers, such as the one below, you can get a handle on your Black Friday strategy. The checklist is designed to help clarify factors such as cash flow, inventory costs, paid advertising, and increased acquisition costs that will impact your Black Friday profitability.
Benefits of Participating
There’s no denying that Black Friday is a massive day for online retailers. Customers wait for Black Friday deals to make big purchases, resulting in online traffic that is 2x higher than the average October day. You can make the most of the year’s busiest shopping event by increasing brand awareness, selling down inventory that is expiring or in excess, or promoting holiday or season-specific products or services.
This time of year can be particularly rewarding for brands with billing opportunities in the future. For example, if you sell skincare and your product is delivered every four weeks, you are primed for Black Friday because you’re making money off of rebilling rather than acquisition costs.
When Should I Start Planning for a Black Friday Promotion?
You should start planning for Black Friday when you make your annual budget and forecast in December of the prior year! Yes, you should already be considering large sales this far in advance. This allows you to plan for inventory, promotions, marketing budget, and other associated costs throughout the year.
Is It Worth Participating in Holiday Deals?
If you’re launching a new digital product, this is a great opportunity to get customers into your system for later promotion. You can optimize deals by selling out overstock or expiring inventory. If you’re a more prominent brand and have the budget, this is a wonderful opportunity to make a splash with marketing and promotions. If you’re willing to invest in it, Black Friday is also a great way to create a brand voice.
Rachel Phillips
CEO of Fully Accountable
