Inside Details Of Nike, A Popular Shoe Company Making Huge Profits
Inside Details Of Nike, A Popular Shoe Company Making Huge Profits:
Nike is a popular shoemaking company that is an American MNC. This company is engaged in the designing, development, production, and marketing & sales of footwear worldwide. Due to rich shoe designs and the utmost quality, this company has gained huge goodwill in the shoe market.
Many of the people around are keen to know the inside details of this company as how much is their costing price to make a shoe, how much profit they make in making shoes, how do they fix their selling price and so on.
Selling cost - Cost price
You must know the Nike company deals with all types of shoes. You can find a tennis shoe design with them or any sports shoes which many of the sportspeople endorse and even recommend for better outputs.
Moreover, you can also get customized shoes from Nike which allows you to have your name on shoes.
So, let’s understand what is the costing of a Nike company with it makes a $100 shoe. Here we can learn how much a Nike company spends on a sneaker whose selling price is set to $100.
The real answer is, it costs them around $28.50 only.
As per Matthew Kish a Portland business journal that got an opportunity to have a look at the production pricing of Nike Company. He got this chance as one sports product management session was organized by Oregon’s University and he was a part of that workshop where he learned about Nike’s production pricing.
Breakdown of production pricing
This brand is always happy to announce as to how they started their company. So let’s understand the breakdown of Nike’s production pricing in detail below. (Selling price is $100)
The factory FOB cost came to $25.00
Expenses on sea freight & insurance $1.00
And on duty charges, it cost them $2.50.
The final costing came to $28.50
These figures are on averages, as the cost of production for an individual shoe can vary based on the materials. According to this production pricing breakdown, the average cost of a sneaker by Nike is $28.50 for making a sneaker and it is sold in the market for $100.
This sneaker is sold to a wholesaler at just $50, this means that Nike company earns a profit of $21.50 from a wholesaler, which cuts down to $4.50 after deducting SG&A & taxes. So instead of going with this option, Nike prefers an increase in their sales directly to the retail counters for added profit.
So, this is how you can learn an amazing thing about this company as how much profit is earning by selling one pair of shoes, so just imagine how much this company earns by selling a large number of shoes in bulk.
This is a fact which an average person isn’t aware of. But Nike is a big brand and one of the most popular manufacturers and retailer of footwear.
No matter, whether you want to have logo sneakers or want to design your sneakers online, visit www.freakyshoes.com today to get hands-on the best and affordable shoes.