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This statistic is not included in your account. Skip to main content Try our corporate solution for free! Single Accounts Corporate Solutions Universities. Premium statistics. Read more. At a cost of 80 U. At the other end of the list, Vans and Converse have the lowest median price at around 40 U. Why are Nike sneakers more expensive?
Nike does offer moderately priced sneakers, but consumers are willing to pay high prices for signature models associated with high-profile athletes. Basketball icons LeBron James and Kyrie Irving are two players who have exclusive footwear collections with Nike, and these unique sneakers can command a greater price. Nike is able to agree lucrative endorsement deals with sports stars because it is the leading apparel brand worldwide , generating a global revenue of more than 39 billion U.
Nike races ahead in the U. An American multinational corporation with its headquarters in Oregon, Nike dominates the sports footwear market in the United States. Founded as Blue Ribbon Sports in , the company changed its name to Nike at the start of the s. Nike operates around retail stores in the United States , and the brand is regarded by many American consumers as their favorite sports shoe manufacturer. And no retailer would buy from Nike because they would be undercutting the retailers profit.
The very entity that makes Nike billions. No company near Nike size would ever do that. DTC business includes sales made through Nike-owned retail stores and Internet websites. This channel allows Nike to bypass wholesalers and sell its products directly to end users at a higher margin. All this is saying is, blame the retailers for bilking kids and adults unfortunately out of their money. All other mark ups are not profit only and split amongst thousands upon thousands of reatailers.
Misleading and still tremendous profiteering. Sneakers are not needed for survival. Too bad. Sneakers have been a part of popular culture ever since Converse introduced Chuck Taylor canvas basketball sneakers in Sneaker companies, such as Nike and Adidas, outsource production to more than 1 million workers in factories in China and other countries around the world where the labor costs are relatively cheap. In recent years, rising costs of labor in China have impacted profit margins , and in response, some companies have moved their manufacturing operations to Vietnam, Indonesia, or Thailand.
In addition, the big shoemakers are continuously shifting some manufacturing tasks from human workers to robots in order to reduce labor costs.
A significant part of sneakers' value includes the price companies pay celebrity endorsers to attract consumers and build long-term loyalties. In the s and s, sneaker companies partnered with top athletes to develop footwear designed to boost athletic performance. Nike's Air Jordan brand sneakers—first introduced in —are the most famous example and have made Michael Jordan one of the richest athletes in the world. Furthermore, as young consumers associate sneakers as much with fashion as they do with sports, companies have partnered with key trendsetters in arts and entertainment to design and market sneakers.
Adidas signed a partnership with Kanye West, for example, to create Yeezy Boost sneakers. Rihanna, Kendall Jenner, and Jay-Z are among other celebrities that partnered with shoemakers to launch unique brands.
The competition for sales among leading sneaker companies also drives sneaker prices. When a celebrity is involved with a line of limited-edition sneakers, some consumers want them, and they want them at any cost. Social media helps to fuel their desires. Private collectors generate buzz by posting pictures of the latest sneakers on social media.
The resale market also fuels demand for sneakers. Resellers typically wait in line outside brick-and-mortar stores for limited editions, so they can resell them online at a profit.
The fact is that avid sneaker fans are often willing to pay a significant markup for popular designs. Social media trends and the impact of resellers indicate that sneaker companies can maximize their profits by manufacturing sneaker quantities at levels just below demand. Sports Illustrated. Omega watches has a tradition like few others. Uniqlo vs Zara. An interesting case study.
Read on to find out which is better between the Zara and Uniqlo fashion brands. Was This Article Helpful? Sources and Further Research. Share on facebook. Share on twitter. Share on linkedin. Share on pinterest.
Fashion Marketing. Retail Marketing. Fashion Entrepreneurship. Fashion Finance. Credits and acknowledgements.
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