Solereview goes where no one has gone before. Sneaker economics 101.
Source: What does it cost to make a running shoe?
This is quite possibly the most concise breakdown of the cost of a shoe I’ve ever seen. If Josh Luber can get a Ted Talk for Campless, then Solereview needs to refine this data and prepare for a talk.
I scratched the surface in this interview with Housakicks, but this analysis is next level. Check it out by clicking the Source link.
So that explains why shoes can be marked down so much. Hard to imagine that only 5% goes to marketing, given how much money spend on endorsements, commercials, etc. I guess that just illustrates how much of the product is sold. How many pairs of sneakers does Nike sell each year?
You would have to peruse the earnings report for that answer on how many shoes they sell. Here is the link: http://news.nike.com/earnings This dude did one hell of an analysis. While I only did a surface analysis in the video, he does miss the fact that Nike is intentionally pushing stores out of business to get more direct to consumer action. He is also analyzing running shoes which Nike makes a ton of these shoes at this small margin, but when you consider that over half of Nike’s running shoes sell for over 150 these numbers are quite different and fall more in line with my video discussion.
Also explains why Nike makes retailers take on so many shoes. Can’t just get the Jordan’s, gotta have every shoe that goes with it.
Having an account is not the cure that many in the sneaker world assume.