Stores loose money on Boxing Day sales?

[ScubaSteve]

Alright, here's my two cents...

I used to be a distributor for snowboards and wakeboards. If you own either of these products, it probably passed through my hands. I also had my own shop which I sold out of, so I know how pricing works at both ends.

I can't speak for LFS mark ups as they have very high losses (imagine if that goldflake angel you just ordered in kicked the bucket...) and they different business models but, in my industry, every time a product changes hands it doubles in price. If I bought a board from the factory for $100, I'd sell it to a shop for $200 and they'd sell it for $400. This is rough numbers but gives you an idea. Some products, especially the small one people buy a lot of (like skateboard wheels and bearings) have much higher mark ups.

For boxing day I'd get pretty good deals from the factories, which I'd pass on to the dealers. The factories want to clear out stock for the next model year and, since no one is buying wakeboards in the dead of winter, I was also generous on my pricing. So the shops do see savings for this reason.

There is also the whole thing of selling in bulk. Though I was selling m product for less, there are so many people buying on boxing day that I would make up for it through volume. Boxing day for my shop was often more profitable than the entire preceding holiday season and I'd make enough money to make-up for the sales doldrums that follow Christmas.

So, it really depends. Most shops aren't going to be losing money but they don't necessarily make as much on each product they sell, but they make up for it through volume.