Thursday, July 30, 2015

Shoe Shopping Is A Total Scam.

Honestly, I like to shop. Yeah, I know... I'm one of the rare guys who enjoys shopping. Yet, if there's one thing I don't like to shop for, it's shoes. I wear a size 10.5 Wide, which is a fairly hard combination to find. Thankfully, I can depend on Skechers to make a pair of tennis shoes that I fit into.

Today was a different experience, though. I've wanted to find a pair of casual, Oxford style shoes for a while. Unfortunately, I've had no luck in finding any for a reasonable price. Sure, I could pay upwards of $75-$100 for a pair that will fit me, but that's just ridiculous. As a general rule of thumb, I won't pay more than $50 for a pair of shoes -- and that's pushing it.

The very moment you walk into a shoe store like this, you're in immediate danger of being ripped off.

It's not that I can't afford a pair of $100 shoes, it's just that I'm not dumb enough to spend that much. They're shoes, for goodness sake! I wear them on my feet -- it's not like they can launch me to the moon. Shoes simply should not cost that much. In reality, they don't... and I have proof.

Last year, a thirty-plus year veteran of Nike revealed a long-standing mystery within the tennis shoe industry. Presenting before the University of Oregon's Sports Product Management program, Nike employee Steve Bence broke down just how much a typical $100 pair of Nike shoes costs to produce. I won't bore you with the exact details, but Bence provided some startling numbers. A pair of $100 Nike shoes costs about $28 to make and ship to the United States. By the time that pair of shoes has overhead costs and taxes levied upon it, Nike sells it at wholesale for around $50, making approximately 9% profit. I honestly don't take issue with this -- 9% profit is reasonable. Now, here comes the shocking part.

Once the shoe is purchased at wholesale by a retailer, they immediately raise the price to $100! That's where all the profit goes -- to the retailers. And remember... those shoes are being sold by part-time employees making minimum wage with no health benefits. Shoe retailers like Foot Locker (whom also owns Champs, Footaction and Eastbay) are making an absolutely killing on their retail products. Foot Locker was ranked #400 on the 2014 edition of the Fortune 500 list -- their market value was an astounding $6.8 Billion. Obviously, the profit margins are even higher on shoes that get top promotional billing, like Air Jordans.

So no, I won't buy a shoe that's been marked up nearly 100% percent at retail... and I hope you wouldn't either. Be a smarter shopper!

No comments:

Post a Comment