Look to the right if you’re new to this site and on a desktop device. You see that logo over that says ARCH Started as a Shoe Company? If you’re on a mobile device scroll down to the bottom and you will see the same link. I have to establish that unlike any other sneaker site you visit, I’ve had two different footwear companies. I created my first shoe in 2006 under a license for a brand named Sho-Shot based in Canada. Just to make sure, while you’re laughing about the name, the shoe was featured at Madison Square Garden. I outfitted 9 college basketball programs, the Harlem Wizards, Puerto Rican Legends, Bobbito featured the shoe in Bounce Magazine, I can keep going on about Sho-Shot but I launched ARCH in 2009 and since then I’ve sold over 600 pair of my own shoes that I either designed or paid a designer to create (shout out Ian Gale for the CG097II). I did all of this and my name isn’t Ball and I didn’t play D-1 basketball and I’m not a millionaire.
I write all of that to say that Lavar Ball can pull off what he’s doing, but unfortunately he’s not prepared for a problem that I’ve seen hurt Inkkas and other footwear brands that launched via Kickstarter and independently.
MINIMUM ORDER QUANTITY
I was able to avoid MOQ and freight because when I went into my relationship with the manufacturer in China I paid for samples up front and then I paid for production prior to ever making a shoe. I utilized a Nike Free inspired outsole for my running shoes, and casual shoes. I paid for the outsoles ahead of schedule before I ever created an upper or a shoe. When I made my basketball shoe it was with 361 and the shoe was dope, but I couldn’t afford to bring it to market because of the technology I had to adhere to a minimum order quantity. I spent 1500.00 on those three samples! When I made my running shoe and casual shoe I also paid 30.00 dollars a pair for the production of my shoes, which is a really high price and it doesn’t include import fees, shoe box price, labels, which was all done by hand!
In other words when I finally prepared to make a shoe I had already dumped over 20,000 dollars into outsoles and I didn’t make many shoes at all in my first batch. They were truly samples.
Alright let me get to what Lavar Ball is doing that a lot of people have done and why they have created a ton of issues for themselves.
- MOQ – It doesn’t matter who you are. Manufacturers do not like creating 1 of 1. When they fire up the machines and bring their people in to work, they are expecting an order that is consistent and even. What does this mean? Lavar, like a Kickstarter person, is taking pre-orders. In doing so it seems like the perfect plan, but it isn’t. The manufacturer will expect a case of shoes or a container. A minimum of order of 2400 pair. Those shoes will have to be made in either a half or whole so he will have to make either 2400 or 1200 pair. The smallest large quantity he could MAYBE get away with is 600. Even then those pairs will have to be even in number.
For Example:
Size 8 20 pair
Size 9 20 pair
Size 10 30 pair
Size 11 30 pair
Size 12 30 pair
Size 13 20 pair
Now what does this do to Ball’s orders and people on Kickstarter? When you take pre-orders the sizes are going to be all over the place. You might have 1 size 8 and 30 size 13s. The manufacturer is going to want you to keep the numbers even. They aren’t going to make you 1 size 8. You will have to make 20. You are now stuck with inventory. What Kickstarter people don’t get is that this eats up the money left to ship and that “profit” you’ve earned. Now Ball has covered this by increasing the price of the shoes, but there are other issues of course.
The way I offset this problem was by limiting the number of shoes per size when I did a Kickstarter/pre-order campaign. I set up my campaign in a way that covered the cost of an even number of shoes and I only made a limited number available in each size. Ball hasn’t done this. Their site is simply taking orders. BIG MISTAKE because I’m sure that he hasn’t accounted for number 2.
2. Incorrect Sizing and Defects
Manufacturers are notorious for defects. I’ve written about this on the website a lot. In every batch of 100 shoes I’ve made, I’ve had a 10% defect rate. I usually gave these shoes to the homeless or to charity. Those shoes decrease how much money you generate.
Kickstarters and Lavar Ball can’t begin to understand the frustration that arises with damaged shoes. It forces you to take a loss because the manufacturer isn’t shipping until the shoes are paid for. If Lavar Ball doesn’t send a quality control analyst to the factory, he will have damaged footwear. It’s inevitable and it will catch up with them. I actually had a really good design and colorway go completely to charity in the CG097II. When the women’s shoe arrived it had design lines on the upper. This also happened with my Pitt Colorway. There was another issue with my shoes sometimes… which makes the damaged shoes not even the worst part of the issues. The next thing that he probably hasn’t prepared for is
3. Sizing Issues
On my last shoe I made, the ARCH TR-114, it wasn’t the first time the sizing was completely wrong. The shoe was sized at a 13, but was actually a narrow size 12. I had to relabel all of the boxes (the labels had already been made so I had to create new labels for size 7 since the smallest size was supposed to be an 8). My confidence in the shoe was shook because I didn’t know what size or what people would say when they received the shoe. I had to accept all returns on the shoe and there were a few due to sizing. Lavar Ball isn’t even considering how many returns he could possibly have… or is he? He has implemented a NO RETURN POLICY. I would think people wouldn’t order the shoe simply based on this policy, but people are still ordering which is surprising.
4. GS1 and Barcodes
One of the biggest things that enabled me to sell my shoes was launching via Amazon. I know I’ve had a lot of negative things to say about Amazon, but they allowed me to reach an audience I would have never met. Lavar Ball has probably never heard of the GS1. This is where you register for your barcodes. In order to sell on Amazon, and eBay is transitioning to this as well, you need a UPC code. In order for Footlocker or retail stores to carry your product you need barcodes. This is another expense. It isn’t big, but not having these ready for labels can be a pain. Any serious footwear company NEEDS upc codes. Which leads me to the final thing that Lavar Ball probably hasn’t planned for and honestly I think it is something that is overlooked in every aspect of the sneaker selling business.
5. Chargebacks, Claims and Fraud
You are selling a 500 dollar pair of kicks. You’ve never sold kicks before so you have no idea how this process works. When you sell a shoe that is expensive there are shipping policies that can help you offset issues. I won’t get into this. What I will discuss is the fact that chargebacks and claims happen at the highest rate on expensive kicks. A Chargeback is when a customer is not happy with the product. They can contact their credit card company and claim that the shoes are faulty and there isn’t a return policy. Their credit card company will file for a chargeback. This money is then held in the air until the chargeback process if complete.
A claim is similar to a chargeback so I will skip to fraud. In particular mail fraud. Every pair of ZO2’s will have to be insured upon shipping. They will also have to be shipped in custom boxes as a damaged shoe box could lead to a chargeback. This is a cost most new sneaker companies fail to account for. A box can run you in bulk about 85 cents a box. Postage will be 15.00 dollars plus signature shipping so the brand is looking at about a 19.00 dollar shipping fee. If they ignore that 4 dollar signature then you can almost guarantee 5-10% of those shoes will be claimed as not arriving. When this happens funds are automatically reverted if the shipping company can’t prove receipt.
I’m not wishing anything on the Ball family, but these are a few of the things that could potentially happen on this footwear launch. I already see issues with number 1 which leads me to believe that the other 4 are bound to be a problem.
