Should My eCommerce Business Offer Black Friday Deals?

Although it started in-store (and in America), Black Friday has grown into a global online sales event that stretches across days and breaks sales records every year. For eCommerce brands, though, deciding whether to run Black Friday deals isn’t a simple yes or no. Discounts can bring in sales, but they can also squeeze profits and negatively shape how customers think about your brand in the long run. It’s always worth slowing down to consider whether offering Black Friday deals is right for your sales strategy. 

In this article, we’ll walk through the main things to consider when it comes to Black Friday Deals, including:

• Price elasticity of demand across eCommerce categories (i.e. how sensitive shoppers in your category really are to discounts).
• Gross profit margin thresholds and discounting viability (i.e. what level of discount your margins can handle without hurting your profits).
• Competitive intensity and risk analysis (i.e. how crowded and competitive your space is during Black Friday).
• The hidden risks and costs of inventory and fulfillment during Black Friday.
• The long-term impact of offering Black Friday promotions on your brand image and customer loyalty.

After reading, you’ll be able to make smart business decisions about whether offering Black Friday promotions makes sense for your business, or if your energy is better spent elsewhere. Let’s get stuck in!

1. Price elasticity of demand across eCommerce categories 

In this section, we’ll consider how sensitive to discounts shoppers in your category are, and how this affects whether you should be offering Black Friday deals.

What is price elasticity and why does it matter?

Price elasticity is just a fancy way of saying: how much do customers change their buying behaviour when prices go up or down?

Think about one of your products: if its price were to fall, you’d expect to sell more units. But the key question is,  will the increase in sales volume make up for the loss in revenue from the lower price?

For example, if you drop the price by 15%, will you see at least 15% more orders to offset that reduction in price? This is where the price elasticity of demand comes in.

• Elastic demand means that sales volume changes more than proportionately to the price change.
• Inelastic demand means sales change less than proportionately to the price change.

Some product categories are highly price-sensitive, where a small discount can lead to a big jump in sales. Others, especially those tied to status or brand prestige, show little change in demand even when prices are cut.

On Black Friday, this really matters. If your products are highly elastic, discounts can bring in a wave of extra sales that outweigh the lower margins. But if they’re not, you risk giving away profit on sales you would’ve made anyway, without actually growing revenue.

How price sensitivity varies by category

It’s important to remember that not all product categories respond to discounts in the same way. You can calculate the price elasticity of demand (PED) for your products if you’ve collected data on sales volumes at different price points. The formula is:

PED = % change in quantity demanded ÷ % change in price

In reality, most companies don’t have this data. Here are some general patterns by product category:

• Electronics: Extremely price-sensitive. A 20 to 30% discount can often double weekly sales during Black Friday.
• Fashion: Varies widely. Fast fashion moves quickly once discounts hit 15 to 25%, but luxury brands are less responsive.
• Homewares & Furniture: Moderately sensitive. Big-ticket purchases often get delayed until Black Friday if customers expect 20%+ off.
• Health & Beauty: Very sensitive in the mass market, but not so much in luxury skincare or premium lines.
• Niche / Specialist / SaaS: Depends a lot on competition. When there aren’t many substitutes available, price doesn’t matter as much.

The key takeaway is to use discounts strategically. Electronics, appliances, and beauty bundles usually perform well. Premium, exclusive, or low-competition products? Not so much.

Using data to guide your decision making

Unsure how to work out price elasticity for your business? You can use data to determine which products should be put on sale, and by how much, to stay on top this Black Friday. 

Here are some best practice tips:

• Use your sales history and competitor data to predict how customers will respond to different discounts.
• Offer dynamic pricing and tailored discounts by product type instead of blanket sitewide sales.
• Test and adjust in real time, making sure your offers drive maximum sales without sacrificing unnecessary margin.

Remember, not all discounts are equal. Understanding your category’s price elasticity can help you decide whether and how to run Black Friday deals.

2. Gross profit margin thresholds and discounting viability 

What level of discount can your margins handle without hurting profits?

What is your gross profit margin and why is it important?

Your gross profit margin is the difference between the price you sell a product for and what it costs you to make or buy it (your Cost of Goods Sold (COGS)). That margin is the “cushion” that covers everything else: marketing, fulfillment, returns, customer service – what’s left over is your net profit.

When you run discounts, you’re cutting straight into that cushion. If you don’t calculate carefully, you can wipe out your margin completely, leaving you with a busy Black Friday and nothing to show for it financially.

Here are some industry benchmarks for context:

• Homewares & Furniture: Very high margins (70%+), but cash is often tied up in inventory.
• Fashion & Apparel: Around 38% on average, with slight differences between DTC and mass-market.
• Electronics: Slim margins (20 to 25%). Black Friday discounts can eat this up very quickly.
• Health & Beauty: Around 40%, with premium and luxury lines going much higher.
• General eCommerce: Typically 30 to 40%, so there’s some wriggle room. 
• Digital products/SaaS: Often much higher, since costs are lower once the product is built.

Can you afford to offer Black Friday discounts?

If your margins are thin like in electronics, a 20 to 30% Black Friday discount could erase your profits entirely once you factor in returns, shipping, and higher ad spend. For categories with stronger margins (35 to 60%), discounts can work, but they need to be carefully targeted instead of across the board.

Larger brands often model different discount scenarios in advance. They’ll run:

• Profit simulations at different discount levels, factoring in higher return rates and ad costs.
• Contribution margin analysis to check whether the extra sales are truly incremental or just existing customers buying earlier (and cheaper).
• Cost-to-serve reviews that include warehousing, returns, and customer service.

How to protect your margins during Black Friday

Blanket discounts across your whole store almost always hurt profitability. So, if you’re offering discounts you need to be smart about it. Here are some tactics you could try: 

• Segmented discounts: Only offer deals to price-sensitive customers or at-risk segments.
• Bundles & spend thresholds: Use offers like “Spend $100, save $20” to boost average order value and protect margins.
• Value-add offers: Offer limited bundles, VIP-only perks, or free-with-purchase gifts to protect premium products from deep cuts.

Done right, these strategies can recover 5 to 10% (or more) of the margin you’d otherwise lose, sometimes even turning a profit while still competing in the Black Friday frenzy.

Just remember to make sure your margins can handle Black Friday discounts before launching them, and if they can’t, focus on smarter, more targeted offers that drive sales without draining profitability.

3. Competitive intensity and risk analysis 

How crowded and competitive is your space during Black Friday?

Competitive dynamics during Black Friday

Black Friday is a high-stakes week for eCommerce. Ad costs spike as every retailer competes for attention, with paid search and social ads often costing 2 to 3 times more than usual. At the same time, you’re up against marketplace giants like Amazon and TikTok Shop, who can afford to offer deep discounts and dominate visibility. Amazon alone drives over 25% of visits to the top 1,000 retailers during the “Cyber Five” period.

You also have to factor in consumer behaviour. Around three-quarters of shoppers say price is a major influence on their purchase decisions, and more than half actively compare deals across stores to find the best bargains. This means that, during Black Friday, many consumers hold off on buying until they spot the best offer or bundle, and they can easily jump between brands before committing.

The challenge is to balance the risk of running promotions and cutting into profit margins with the risk of not participating and losing valuable traffic and market share as a result.

What are the risks of not participating in Black Friday?

Skipping Black Friday or taking a weak approach comes with real risks. Brands that stay at full price may see:

• Declining conversions and reduced online visibility
• Shoppers postponing purchases or permanently switching to more deal-friendly competitors
• Less efficient ad spend as clicks and conversions fall versus competitors offering discounts

That said, being overly aggressive with discounts can also backfire. Unprofitable or poorly targeted deals can affect your margins and hurt brand perception, especially for premium or luxury products.

How to counteract the risk of not participating in Black Friday

Many brands succeed by being selective on Black Friday rather than giving blanket discounts. Some strategies include:

• Offering VIP-only or early access sales to reward loyal customers without cutting prices for everyone
• Discounting only core SKUs or overstock items while keeping new or limited-edition products at full price
• Using perks like free shipping, gifts-with-purchase, or extended returns to attract attention without heavy margin loss

With this approach, you can stay competitive and maintain your brand’s long-term value, without getting swept up or eroding your margins.

4. The hidden risks of inventory and fulfillment during Black Friday

How can you avoid running out of stock or holding too much during Black Friday, and are there hidden costs in shipping, storage, and returns that could impact your profits?

Stockouts and overstock

It can also be difficult to get inventory and fulfilment right during Black Friday. If you run out of stock too quickly, you lose potential sales and visibility, but if you keep too much on hand, you end up paying more for storage (and possibly having to clear leftover items at a discount, which can hurt both your profits and your brand’s image). Planning the right amount of inventory is really important.

Using demand forecasting to predict how much inventory you’ll need

Predicting how much stock you’ll need for Black Friday isn’t as simple as looking at what sold well last year. Shopping habits, trends, and even the platforms people use to buy can shift dramatically from one season to the next. You need to combine historical insights with live market awareness and smart product prioritisation to get it right.

Start by looking at your past sales data, but don’t just copy and paste last year’s numbers. Adjust them to account for recent volatility, especially the unpredictable spikes and dips we’ve seen in eCommerce over the last few years from all channels, especially SEO. 

Then, layer in real-time insights. Pay attention to what’s trending on social media, what your competitors are pushing, and which products are starting to gain attention in your category. This helps you spot which items are likely to surge and which may fade before the big weekend arrives.

Finally, remember not all products deserve equal treatment when it comes to stocking. Use an “ABC” approach to prioritise your inventory:

• “A” items are the bestsellers that drive most of your revenue and traffic (around 80%). These should be well stocked and ready to move. 
• “B” items are steady performers that support your core range. Keep enough on hand to handle expected volume without overcommitting.
• “C” items contribute less to sales and should be managed carefully to avoid tying up cash in slow-moving stock.

If you can, maintain flexible reorder options with suppliers or use smaller, more frequent restocks during the peak period. This approach reduces storage pressure and helps you stay agile if demand suddenly shifts.

Storage and logistics costs during Black Friday

When it comes to inventory, you need to have the right amount of products on hand but also be able to manage the costs and logistics of getting them to customers. During Black Friday, warehouse space can get tight, delivery fees rise, and return rates spike, especially in categories like fashion. All of these factors can quickly eat into your profits if you’re not careful.

Brands that stay ahead plan for these costs in advance and take practical steps to reduce risk. Key strategies include:

• Negotiate flexible minimum orders with suppliers to avoid overstocking.
• Use temporary or regional storage to handle peak-season demand without tying up permanent warehouse space.
• Plan post-season clearance early, focusing on targeted promotions or value-add bundles rather than broad discounts.

This will help you manage your Black Friday inventory without sacrificing margin or service quality.

Post-sale analysis

Once the rush is over, take a close look at what happened to help refine your forecasts for next year, especially as customer behavior shifts quickly under the influence of social media and AI-driven shopping trends. 

You can ask yourself the following questions to make smarter inventory and discount decisions in the future:

• Which products actually contributed to profit versus just adding volume? 
• Were there certain SKUs that sold exceptionally well, or items that underperformed despite high expectations? 
• Were there any items with exceptionally high return rates?

5. The long-term impact of Black Friday on your brand image and customer loyalty

Can Black Friday promotions hurt your brand?

Discounting can be powerful because it can drive huge short-term spikes in sales and bring in new customers. But if they’re not handled carefully, Black Friday sales can also have the negative effect of cheapening your brand’s value, which can put your long-term margins at risk.

Some of the main risks include:

• Erosion of perceived value: Frequent deep discounts teach customers to wait for sales, making full-price purchases harder to justify.
• Commoditisation: Your brand risks being seen as a discount destination rather than a source of unique, high-quality products (which is a major concern for premium, luxury, or artisanal brands).
• Weaker loyalty: Customers drawn in by steep deals often have low lifetime value and may jump to competitors as soon as the next offer appears.
• Discount dependency: Regularly running big promotions can create chronic profit and cash flow volatility, making long-term investments and strategic planning more difficult.

That said, promotions don’t have to hurt your brand, and they can actually strengthen it if done thoughtfully. The key is being purposeful, targeted, and making offers feel fair or exclusive. 

For example:

• VIP or loyalty early access: Reward your top customers while protecting full-price perception.
• Limited-edition, value-add promotions: Offer bundles, exclusive items, or charitable contributions to create positive emotional connections without setting low price expectations.
• Cause-based alternatives: Taking part in initiatives like Green Friday or donating a portion of your sales instead can position your brand as authentic and socially responsible, which appeals to more conscious consumers.

When executed well, these approaches can drive both short-term revenue and long-term loyalty without undermining your brand’s image. Some examples of brands that got this right include London Sock Co., who paired a modest discount with a high-profile charity donation last Black Friday, and boosted their average order value by 180% while also enhancing brand loyalty. Patagonia also famously avoids Black Friday and instead focus on sustainability campaigns like “Don’t Buy This Jacket”. These campaigns help to reinforce trust and admiration among their core customers, without evidence of lost market share.

6. How to make Black Friday work for your brand

Consumer behaviour and deal-hunting psychology

When it comes to Black Friday, shoppers are driven by urgency and emotion. Limited-time offers create a sense of FOMO, and consumers derive satisfaction from feeling like they’ve found a great bargain, especially during the current Cost of Living Crisis. This means the perceived size of the discount can matter just as much as the product itself. But how can you compete?

It’s important to consider how your audience participates in Black Friday, as different generations behave in distinct ways. Gen Y and Gen X remain the most active and highest-spending cohorts, often researching multiple channels before making a purchase. Meanwhile, younger shoppers, particularly Gen Z, are increasingly skeptical of repeated or misleading discounts, and between 15% and 18% of young shoppers actually believe the best deals happen before Black Friday itself, so it’s important that your promotions are authentic and transparent.

When it comes to long-term value from Black Friday shoppers, it also depends on how you engage with them beyond the initial purchase. Aggressively chasing volume at low margins tends to attract “deal tourists” who may never return, so make sure you follow up with personalised post-sale engagement to turn first-time buyers into repeat customers and generate a higher lifetime value.

Customer segmentation to protect margins

The most effective Black Friday campaigns don’t treat every customer the same. Smart brands use segmentation to protect margins and drive better results. For example, customers who would have purchased at full price (like recent buyers or highly loyal VIPs) can potentially be excluded from discounts, while price-sensitive or at-risk segments can be targeted without undermining sales from those already willing to pay full price.

Brands that apply these strategies often report significant savings on marketing and promotional spend (typically 7 to 18%) while simultaneously increasing average order value and improving long-term retention.

It’s also important to respond in real time to shopper behavior through things like abandoned cart offers, timed incentives, and last-chance deals. You can also set up gamified experiences like quizzes, bundle offers, tiered discounts, and VIP-only private sales to create excitement and urgency without eroding margins across the board.

Post-Black Friday retention and LTV management

Turning one-time bargain shoppers into loyal, repeat customers is key to your long-term success. To do this, use strategies like targeted replenishment offers, loyalty program upgrades, and personalised recommendations that keep new customers engaged.

Distinguishing between new and returning shoppers helps brands tailor follow-up communications and offers to maximise lifetime value. The brands that excel at this are more likely to convert a seasonal spike into lasting growth, ensuring Black Friday doesn’t just boost short-term revenue but also strengthens the customer base for months and years to come.

7. Evaluating your Black Friday success

After Black Friday ends, you’ll have loads of useful data to understand the impact it had on your business and inform your sales strategy going forward.

Here’s what you should look at to get a full picture:

• Gross profit margin before and after discounts.
• Net incremental revenue and net profit, factoring in returns, fulfillment, marketing, and operational costs.
• Order conversion rates, average order value, and cohort retention to assess the lifetime value of new customers.
• Return rates broken down by product and segment.
• Market share changes compared with core competitors.

To really understand how your Black Friday campaigns are performing, it’s not enough to just look at total sales. You need a complete picture that combines different sources of data. Marketing analytics, like UTM and campaign tracking, show which ads or emails drove each sale. eCommerce reporting tools, such as GA4, reveal how shoppers behaved on your site, including which products were viewed, added to cart, or abandoned. CRM segmentation adds another layer, helping you see which types of customers responded best to different offers.

By connecting all of these insights, you can see what actually made money, what was just volume, and which deals may have harmed your margins or your brand image. Without this holistic view, it’s easy to assume a campaign was successful simply because sales went up, when in reality the promotions may have been unprofitable or trained customers to only buy at discounted prices.

Need help getting ready for Black Friday?

Preparing for Black Friday can be overwhelming, even for experienced eCommerce brands. From ad campaigns and website setup to managing promotions, there are a lot of moving parts. And getting them right can make a big difference to your results.

Contact Create8 for Black Friday help from an award-winning eCommerce agency. We can:

• Set up and manage promotions on Shopify, including discounts, bundles, and automation so everything runs smoothly.
• Design landing pages and creative assets that are clear, conversion-focused, and tailored to your audience.
• Run targeted ad campaigns on Google and social platforms that reach the customers most likely to convert.

Get in touch today to get ready for the sales rush!