I think part of it is how product pricing has changed and economy of scale. Back around 1990-2010 tech companies didn’t sell in as much volume so their margins on each unit had to be large. For example company X was making a TV for $500 and selling it for $700 but they were only selling 5,000 a year. Thus black Friday deals meant they could lower the price to $550 while still earning a profit.
As volume increased, competition forced them to low prices and focus on economy of scale. Now company X is making a TV for $500, selling it for $550, but they’re selling 20,000 of them. They’re making the same profit as they did before, but there’s less room for sales. Now the same sale for total profit would look like $512.
To the company it’s all the same. In both instances they were making 1,000,000 before the sale, and 250,000 during the sale; but to the consumer it went from around 28% off to a %6 off.
To the consumer sensibility it’s bad since it seams like nothing goes on sale, but in actuality it’s good because it’s like everything is on sale all the time; we just don’t notice. It’s also why devices with low volume are so expensive.
I think part of it is how product pricing has changed and economy of scale. Back around 1990-2010 tech companies didn’t sell in as much volume so their margins on each unit had to be large. For example company X was making a TV for $500 and selling it for $700 but they were only selling 5,000 a year. Thus black Friday deals meant they could lower the price to $550 while still earning a profit.
As volume increased, competition forced them to low prices and focus on economy of scale. Now company X is making a TV for $500, selling it for $550, but they’re selling 20,000 of them. They’re making the same profit as they did before, but there’s less room for sales. Now the same sale for total profit would look like $512.
To the company it’s all the same. In both instances they were making 1,000,000 before the sale, and 250,000 during the sale; but to the consumer it went from around 28% off to a %6 off.
To the consumer sensibility it’s bad since it seams like nothing goes on sale, but in actuality it’s good because it’s like everything is on sale all the time; we just don’t notice. It’s also why devices with low volume are so expensive.