Stephen Bittner
This is a fairly common question that people ask themselves. However, most of the people who ask this will still end up
buying shoes at a huge price. Why is that? Well it's simple; While shoes at its most basic form are normal goods, the name
brand pairs are luxury goods. It doesn’t matter your income, everyone reading this has at least one pair of shoes.
Most likely you have more. However, not everyone reading this has a name brand pair.
Name brand shoes aren’t a necessary product. Rather, they are associated with showing off wealth and fashion. The truth is,
you can get a decent pair of shoes for under $25. On Amazon, there are a variety of different options. While you won’t be able to
try it on for yourself, you can look at previous buyers feedback to find if it is your fit. However, you won’t be able to find much below
that $25 price range. This is because of the production and other costs.
A typical $70 shoe will cost about $15 to produce. However, keep in mind that after production, the shoe will be in a factory in a foreign country. It will have to be shipped to the US for an additional cost of about 50 cents. Now it has to be legally imported into the US. This means the government will charge 8.5% of the cost. This adds $1.32 as well as $.32 for insurance and customs. This means that a 70 dollar shoe will cost about $17.10 to end up in the US.
I will then end up being sold to retail stores which will buy at 50% of the retail price. The salesman takes 7% of that for commissions, meaning there is a profit of $15.45. Even that is not the end though. The company still needs to advertise, pay sales, product, and marketing managers, developers, and designers. However, smaller companies are able to bypass some of these stages to lower their costs. This is why some shoes are able to be less expensive than name brand shoes. The biggest contributor is being able to skip the 50% cut taken by retail stores by shipping from warehouses directly to the customer.
However, name brands know that when it comes to shoes, most people prefer to try them out before buying. Because
we are willing to spend so much for our shoes, they gain a much larger audience by selling in stores. They also have to make
sure to keep their brand popular. This means advertisements, deals, frequent new designs to add variety etc. All of this comes at
the expense of profit. In fact, name brands like Nike and Adidas don’t actually make an absurd amount of money like many people think.
Nike only makes about 5$ on the sale of a $100 pair of running shoes and Adidas only makes $2.
In the end, shoes aren’t actually very expensive. What is expensive is the upkeep of name brand popularity and the customer benefits that come with that. If you don’t want to buy an $80 pair of shoes, there are options. All you have to do is acknowledge that you won’t be getting anything name brand.
“How Much Does It Cost to Make a Sneaker? - How Much Does Nike Profit?” How Shoes Are Made: The Sneaker Factory, 12 Oct. 2021, https://www.sneakerfactory.net/2019/05/cost-to-make-a-sneaker/.
Amazon - Official Site. https://www.amazon.com/.
(It wouldn’t let me source the actual link
https://www.amazon.com/s?k=men%27s+tennis+shoes&s=price-asc-rank&page=4&crid=3JCMM0NDZUU4O&qid=
1635270289&sprefix=men%27s+tennis+shoes%2Caps%2C221&ref=sr_pg_4 )
“What Does It Cost to Make a Running Shoe?” Solereview, 25 Oct. 2021, https://www.solereview.com/what-does-it-cost-to-make-a-running-shoe/.
https://www.sneakerfactory.net/2019/05/cost-to-make-a-sneaker/
https://www.amazon.com/sk=men%27s+tennis+shoes&s=priceascrank&page=4&crid=3JCMM0NDZUU4O&qid=
1635270289&sprefix=men%27s+tennis+shoes%2Caps%2C221&ref=sr_pg_4
https://www.solereview.com/what-does-it-cost-to-make-a-running-shoe/
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