BODY WATCH : Sizing It Up : WHY IT COSTS WHAT IT COSTS
- Share via
The typical American owns two or three pairs of athletic shoes, which range in price from a $20 pair of old-fashioned sneakers at a discount store to $135 for top-of-the-line basketball shoes. One big seller has been Nike’s Air Pegasus, which, like nearly all athletic shoes, is manufactured by suppliers in Asia. This accounting is based on a sale at an outlet of a large national retailer.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Cost to Nike:
Materials............................$9.00
Duties................................3.00
Rent, equipment.......................3.00
Production labor......................2.75
Supplier’s operating profit...........1.75
Shipping...............................50
Nike Total: $20
Cost to retailer:
Nike’s operating profit.............$6.25
Sales, distribution, administration..5.00
Promotion/advertising................4.00
Research/development..................25
Retailer Total: $35.50
Cost to Consumer
Personnel...........................$9.50
Rent.................................9.00
Retailer’s operating profit..........9.00
Other................................7.00
Consumer Total $70
SOURCES: Nike Inc., Reebok International Inc., the Finish Line Inc., Just for Feet Inc., Melville Corp., U.S. Customs Service, Athletic Footwear Assn., industry consultants and executives.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
