Originally posted on Housakicks
The Adidas Yeezy 700 Wave Runner sold out on YeezySupply and are now reselling on eBay for as high as $900. I will admit that I’m surprised these actually sold out. Not only were they hideous but they were also overpriced at $300. On Saturday when they initially released, they were still available on the website for quite some time and even became a laughingstock on social media platforms with many of us asserting that,
consumers won’t just buy anything with a Yeezy theme slapped on it.
But I realized I was wrong , but am I really wrong. I started asking myself a few questions this morning .Would these shoes have sold out if they weren’t scarce? Is Adidas playing it safe to sell the perception that “Yeezy has jumped over the Jumpman “? How many of the Yeezy 700 were actually manufactured?
So the question then remains; is Nike really struggling ? I don’t know how many of you guys know anything about Nike’s Futures Orders , but the brand is basically the only one that can afford this luxury. The Futures Orders as it pertains to Nike allow
retailers to order five to six months in advance of delivery with the commitment that their orders will be delivered within a set time period at a fixed price.
So basically six months before the shoes actually hit the retail stores, they are already paid for, which means Nike already made their profit and with that profit, they can also manufacture more units/products for their own locations. So the invested capital is basically obtained from their Futures.
We all know how many Nikestores, factory stores, clearance stores are fully operational as of today. And we have a rough idea of how much the brand actually pays to get their products manufactured overseas i.e. Sneakers, apparel etc . A report by bizjournals showed how much Nike was paying to get a $100 pair of shoes manufactured-$28.50, see picture below
The items that aren’t selling out in stores get sent back to Nike ( RTV) and end up at the outlets where Nike basically either breaks even or still make a heck of a profit. And the retailer only gets a credit toward their next purchase (Futures Orders), which means Nike never has to fork out any money back to the retailer.
So I will ask the question again: is Nike really struggling , it all depends on how we define struggling. The brand might not make as much profit as the years before but they are still making enough profit to remain the most dominant sneaker brand in the market right now .
I don’t think Adidas for one bit will ever outdo Nike and I don’t think the Yeezys like the Jordan Retros will ever get mass produced . Adidas wouldn’t dare mass produce them; but one thing Adidas has realized is that their sneakers i.e the Yeezy and the derivatives ( NMD, Ultra Boost) symbolize “being cool” the same way Jordans Retros and Nike shoes symbolize sports. And Adidas better capitalize on it and is actually doing so which is commendable, but let’s not forget that the Yeezy will never Jump over the Jumpman, at least not in my lifetime.
Chris Burns did a great job explaining Nike’s future Orders in the video below, I highly recommend it
