Black Friday pricing strategy for online stores: a practical plan

Black Friday pricing is often decided in a hurry: pick a discount, apply it across a category, hope it sells. A better approach starts weeks earlier, with clear decisions about which products to discount, how deep to go, what the margin floor is and how to react when competitors move during the week itself. This guide sets out a practical plan for an online shop, including the European rules on advertising price reductions that catch many retailers out.

Start with the rules on "was" prices

In the EU, when you announce a price reduction you must show the prior price, and that prior price is the lowest price you applied in a period of at least 30 days before the reduction. This comes from Article 6a of the Price Indication Directive, described on the European Commission's Price Indication Directive page, and is implemented separately in each member state.

Sweden's Konsumentverket, for example, states in its guidance for businesses on price reductions that a percentage or amount off must be calculated from that lowest 30-day price, referring to the EU Court of Justice ruling in case C-330/23. National details differ, so check the rules in each country you sell to.

The practical consequence for Black Friday is simple: you cannot raise a price in early November and then advertise a large reduction from the higher figure. If a product sold at 799 kr for most of October and was briefly 749 kr in a mid-October promotion, the reference for a late-November discount is 749 kr, not 799 kr.

Decide which products to discount

Discounting the whole catalogue by the same percentage is the simplest plan and usually the least profitable. Split your range into roles instead.

Traffic products

A small number of well-known products where customers compare prices actively, typically branded items listed on comparison sites. These are the products that make shoppers choose your shop. Here you may accept a lower margin to be at or near the cheapest price.

Margin products

Accessories, own-brand items and products that are bought alongside the traffic products. Customers compare these prices less closely. Modest discounts, or none, are often enough.

Clearance products

Slow-moving stock you want out before the new year. Here the decision is about cash and storage, not competitive position, and deeper discounts can be justified even if competitors are not discounting.

Products to leave alone

Items that are scarce, sell well at full price or are already competitively priced. Discounting them gives margin away without changing what people buy.

Set a margin floor before you set any discount

Every product in the campaign needs a lowest acceptable price. A floor is easiest to define as a minimum margin over landed cost, including payment fees, shipping subsidies and expected returns.

Say a pair of headphones costs you 620 kr landed and you sell at 999 kr including 25% VAT. The price excluding VAT is 799 kr, so your gross margin is 179 kr, or about 22%. If your floor is 10% margin, the lowest price excluding VAT is 620 ÷ 0.90 ≈ 689 kr, which is about 861 kr including VAT. A 10% discount to 899 kr stays above the floor. A 15% discount to 849 kr is already below it, and the 20% or 25% that many shops reach for by default would mean selling at well under the margin you decided you need. On this product, the campaign discount is capped at just under 14%, whatever competitors do. For the full method see minimum margin pricing and price floors, and the margin calculator will do the arithmetic for you.

Decide discount depth per product

With roles and floors in place, set discount depth product by product. A useful sequence:

1. Look at where competitors currently sit. If you are already well below the market median, a large discount may not be needed to stand out.
2. Look at last year's Black Friday prices if you tracked them. Competitors often repeat patterns.
3. Choose a target position: cheapest, close to the cheapest, or middle of the market.
4. Check the result against the floor and the 30-day reference price.

Round the final price in the way your customers expect, such as ending in 9 or 99. Consistent rounding is covered in psychological pricing.

Monitor competitors closely during the week

Black Friday has stretched into a week or more for many shops, and competitors change prices during it. If you normally check competitor prices weekly, increase to at least daily from about two weeks before, so you see early campaigns as they start.

Points to watch during the campaign:

• Stock status. When a competitor sells out of a discounted product, you may not need to match their price any longer, and can sometimes move back towards your normal price.
• Suspicious prices. During campaigns, product pages change layout, bundles appear and prices may show with conditions. A competitor price far below everyone else's is more often a misreading than a real offer.
• Comparison sites. Watch where you appear on PriceRunner, Prisjakt or idealo for your traffic products, but remember they summarise other shops' prices; the source is the competitor's own page.

Decide in advance how you will react

Write down rules before the week starts, because decisions made at 11 pm on the Thursday are rarely good ones. For example:

• On traffic products, match the cheapest in-stock domestic competitor down to the floor, and no further.
• On margin products, do not react to competitor changes during the week.
• Do not change any single price by more than a fixed step at a time, so a misreading cannot push a product far out of line.
• Name one person who approves any change below a set margin.

More on reacting to competitors is in price matching strategy for e-commerce.

After the campaign

Plan the return to normal prices as carefully as the discount. Raising prices straight back on Monday morning is normal, but check that any "was" prices displayed elsewhere are removed. Then review: which products sold more because of the discount, which sold the same at a lower margin, and where competitors went further than you. That review is the starting point for next year's plan.

Luska can help with the monitoring side: it checks competitor prices and stock daily, sends undercut alerts and, on Professional plans and above, suggests prices with a reason and confidence score. Every recommendation respects a built-in 8% minimum margin and moves price by no more than 15% at a time, and you approve changes before they are published.

Frequently asked questions

How early should I plan Black Friday pricing?

Six to eight weeks before is sensible. You need time to check the 30-day reference prices, agree product roles and floors, and start more frequent competitor monitoring.

Is it better to discount everything a little or a few things a lot?

For most shops, a few visible products with meaningful discounts, plus modest discounts elsewhere, protects margin better than a flat percentage across the range.

Do the 30-day rules apply to "Black Week" or "deal" banners?

Wording that gives the impression of a price reduction can fall under the rules even without a percentage. Konsumentverket's guidance treats terms such as "realisation", "kampanj" and "erbjudande" this way in Sweden. Check national guidance for each market.