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The Price is Right: Pricing 101


Class is in session, be sure to take notes. Just try not to be Harry and Lloyd As much as I love writing about shoes, I think getting great kicks below retail is more valuable to my readers than any review I put out there. Lots of ďreviewersĒ like to complain and rag about prices of kicks based on tech specs but the fact of the matter is latest and greatest tech doesnít cost much more than regular tech. A lot of factors go into pricing and believe or not performance technology is not the main factor. However, companies know consumers want to pay more for the latest and greatest help move sales. So here is a round up of topics that help you the consumer understand the whys of pricing. How much does a shoes cost to make? This was covered extensively in this†article†and Iím assuming everything is correct or close to it at least. Whatís funny is UBís cost roughly ten dollars more to make but are sold at $180. Same goes for Air Maxes and their mark ups. Brand perception and popularity within a brand goes a long way..more on that below. Why do shoes cost more outside the US? Typically itís due to tariffs but donít worry , weíre going to get a nice price hike too thanks to #45 (not MJ). Learn more about politicking in real time with an industry you actually care about !†Nike, Under Armour, among others, urge Trump to remove footwear from tariff list FWIW I learned that tariffs donít work in college since you just get retaliatory tariffs from other countries and everything just ends up costing more for everyone. Kinda cool yet frustrating to sea mai edoocasion at werck. Why does Nike cost more than other brands? Nike is one of the strongest brands in the world and is mentioned along the likes of Apple, Facebook, Toyota, McDonaldís. Nike sales are†DOUBLE†Adidas and its sales are exponentially bigger than the likes of UA, Anta, Li Ning etc. How much is double ? In sports terms think losing 100-50. Or shooting 140 vs 70 on the golf course. Thatís a damn lot folks and a lot of leverage to play with especially when youíre dealing with billions of dollars. Part of becoming a strong brand†IS†to leverage it in pricing. Why sell a pair of shoes for $100 when you can sell it for $120? Add on the brand power of a superstar like MJ or Kobe or Lebron (or KD or Kyrie or Giannis) and you can add another $10-25 bucks on top of that. Donít think Nike is the only one to do this, all brands do this, even ultra tiny brands like Brandblack. Shoe companies are†not†non profits so it makes sense to maximize profits. As much as ďperformance ď sneakerheads like to think that tech is the only part of a shoe that counts towards retail pricing, sneakerheads in general donít account for much in sales and ďperformance ď sneakerheads account for even less. (My guess is sneaker culture accounts for†maybe†half a percent or less of total sales). Smaller brands which do much lower volume than Nike probably have more ďperformanceĒ sneakerhead purchase percentages than Nike or Adidas since nobody will be out rocking Anta or Li Ning on a hot date. Nike knows all of this, trust me. Throw in Nike.comís 30 day wear it and try it†return policy, their two year warranty (Iíve personally had good success with filing claims with Nike. Iíve probably been rejected maybe twice in twenty years ) along with their return anything new anytime from Nike.com and yea youíre going to have to pay a little more. Adidas.com and UA.com also have similar 30 day policies but they donít allow returns for new items anytime. Why people donít know about this policy is beyond me but hey now you know Toss in Nike athletes propensity for winning vs its competitors, it makes for a winning and more expensive brand overall. Nobody wants to to wear 2nd or 3rd place kicks. Sorry Adidas James, Dame, Tmac, D Rose. ..geez the list is getting longer. Always the bridesmaid amirite? Example: Jordan OG Colorway Retros As I said above Nike is not stupid they know where every dollar is going and the same goes for Jordan Retros. Back in the late 90ís early 2000ís when sneaker collecting starting to ramp up, a pair of AJ IV white cements or black reds cost $100 retail the same as they cost back in 1989. Same goes for the AJ III, V, VI, XI retros that came out the next few years. Fast forward 18-20 years and they charge $200-225 for the same colorways. Twenty years and billions of dollars later, inflation cause prices to doubles, JB just wised up and decided to take that money resellers were getting and putting it into their own pockets. Why sell for $120 and watch resellers pocket $100 when we can get that same $100? No tech innovation at all, just a bunch of nostalgia for the †and high demand to maximize profits. Sometimes AJ Retros sit but usually they are models nobody cares about (7-10, 14 and later) or the colorways are non OG. Everyone wants a piece of history and what better way to show off than on your feet. Obviously Nike is trying to do the same with Lebrons and Kobeís at slightly lower price points but the difference is MJ IS MJ, the second greatest sneaker salesman behind Al Bundy. Donít want to pay Nike retail? Well youíre in luck, Everything sits nowadays so if you wait a month or two youíll see discounts in a hurry. Speaking of retail price decayÖ How fast do retail prices drop? * please note this does not apply to high demand OG Jordan Retros or limited edition shoes* Iím going to use Nike and Adidas as my primary examples. Nobody cares about anything UA aside from Curryís and UA doesnít discount Curryís on their website and it appears that retailers take their sweet time discounting Curryís as well. Iím not sure if itís a UA policy or agreement with retailers but the fact that Curry 4 have popped up at UA outlets in entire full size runs in all color ways that were thought to be sold out suggests itís a UA policy., did I mention they cost 55-75 bucks ? So letís start with a typical Nike signature release at a fairly average price point of $140. Week 1: $140- no discounts or coupons allowed usually. *Dicks in store as well in store Footlocker Finishline etc will allow coupons sometimes depending on the store manager or employee apathy* Got the Carpe Diems for 20% off week of release. Thanks Dickís. Week 2Ė4: units arenít moving, online retailers lift coupon restrictions so after waiting a whopping 7-14 days, you can save $28 dollars. The only shoes that sell out nowadays are OG colorway Jordanís I, III, IV, V, and XI. Maybe Vi. Some YEEZYS This is assuming the sneaker company isnít making five pair for hype beast reasons.†New price:†$ 112 Month 2-3:usually sneakers that are still sitting even after coupon restrictions have been lifted means they are sitting as inventory and itís time to start discounting. Typically youíll see a $140 shoe get a $10-20 discount plus coupons so that $140 shoe is essentially $96-104. This was a personal sweet spot for me personally. But I can still resist at this price because Iíve been playing this game a long time. However, $100 for a good performing shoe with fairly good tech and sig athlete is hard to turn down. But you gotta think from a regular consumer and not performance head.†New price: $96 Month 4-7: expect a bigger discount at this point depending on the player. Russ? freak 1? Those guys arenít needle movers but at least the kicks are fairly reasonably priced. Russ Did the Dew but he ainít top tier material as evidenced from the post KD era. Expect discounts of $25-30 at this point plus coupons . Assuming a 20% discount. New Price: $88 Month 8-12: at this point it is time for retailers to get this garbage off the shelves. $30-50plus coupons. Hell we might even be at the end of the NBA season.. speaking of seasonality and discounts. Assuming max discounts and 20%:†New Price: $72 12 months plus Once sneakers pass the one year mark youíll find them at outlets and Clearance stores. Outlets seem to hold on to previous models for about 18-24 months past the release date and then they consistently show up at discount stores. $ 29.99 -39.99 seems to be the going rate about two years later. Iíve had good luck at Marshallís and Burlington and very occasionally Ross (Ross abs Marshallís are owned by the same company). Always sign up for outlet emails so youíll know what sales are coming up. Obviously this isnít to the dollar but you can see that prices fall fairly quickly then level out and the accelerate again as the new season comes closer to rolling around. Forty to fifty percent off retail isnít unheard of at all when everyone wants the newest upcoming model even if it isnít any better. As you can see prices fall naturally as sales start to slow so if you donít want to pay retail just wait. Each company is trying to extract as much profit from each individual person and if they could somehow price each shoe to each personís tipping point they would. This is why social media networks and data mining all that information is so valuable. Facebook isnít just for sharing FOMO, itís for getting every ounce of data about its users and connecting the dots to make more money. Itís damn cost effective and efficient too. It isnít exact but itís getting there but in the meantime, they just set the price that the data analysts say they should based on a bunch of a models and voila, thatís what they price them at. What about Secondary markets like GOAT, Stock X eBay etc.Ö Iíve had no major issues as a buyer off secondary markets and have been a member on eBay for 20 years (yikes!!). eBay has become†overly buyer friendly†which sucks for sellers but makes purchases a lot safer for buyers (once again shitty for sellers). Iíve only bought a few times off GOAT and Stock X and have had no issues at all although the process of getting the shoes takes a little longer since they verify the item before it ships out to the buyer. The real beauty of secondary markets is that it is truly based on supply and demand†plus†human need and emotion. If a seller realllllly needs the money you can get a steal .. or maybe he or she is just sick and tired of relisting a pair or maybe the spouse said get rid of all your shoes, it might be my lucky day. I have found these markets also let you get near outlet prices since a lot of time resellers are just trying to flip outlet finds. Curry 4ís used to sell for $150-200 but once the outlets starting selling them for $55-70, they started selling on the secondary market for $65-85. The major take away is donít be afraid to use these and or use your credit card as extra buyer protection. Another benefit of secondary markets (excluding Stock since they only do new shoes) is you can buy USED. Just like a car with 1k miles, a pair of shoes worn once or twice or ten times go for a lot less than new. Yes, it is a gross if they are heavily worn but worn once or twice casually ? Iíll take my chances. Actually I have bought more heavily worn shoes and just put some elbow grease into cleaning them and have never had an issue. This of course was back when everything wasnít retroed. What about Nike and Adidas coupons ? Once upon a time Nike rarely did coupons but now they have a 20-25% off clearance sale almost every other month. I know you can find a ton of deals with this but itís best to wait until close to the†end of the NBA SEASON or summer or back to school. Actually back to school is probably the best time because last years shoes have been sitting 7-10 months and are on heavy clearance and you can add on a nice coupon to it. 40-60% off total isnít unheard of and is actually normal Adidas: 2nd is First Last Remember when Ultra Boosts were ultra limited ? People wert paying $225-250 for UBís ? People believed that Boost cost $$$ so they were willing to shell out the extra cash just to try that limited supply. Now that Adidas has released a a regular supply of Ultra boosts, they sit just like any other shoe and have gone on sale for half off retail on Adidas.com Even the Game of Thrones pairs didnít hype to the point of extreme stupid prices.†#youknownothingjonsnow #neitherdoesadidas Anywho, Adidas BBALL IS YOUR BEST BANG FOR THE BUCK†even if it doesnít have marquee champions in their stable. Remember this ? Yea the day after I got an email from adidas for $50 bucks off the Dame 5. $50 bucks off the Dame 5 after he hit a swagger dagger from 37 feet. I got a $50 off coupon after the Raptors won with Lowry and Ibaka too. Winner winner chicken dinner? It didnít get me to buy anything Imagine Nike saying 40 dollars off the kyrie 6 after Kd dropped 40 during the first round (italics) let alone the Finals. AJ IV $23 off after the shot over Ehlo? Yea donít think so. I got a coupon for 30% everything on Adidas.com a month after the Dame 5 was released. A month !! That brought the prices down to $80 and they still sat and Hardens down to $98 (still sitting kids) Adidas doesnít have the market share or brand power like Nike which is great if youíre truly in it for just balling. And if you really arenít into the name, get Adidasís team shoes like the Marquee Boost or ProBounce. They go to heavy discount even faster than my example above by about 3-4 months. Yep even my Marquee Boosts were selling for $54 a few weeks ago which is about what I said in my review. Patience is your friend So seriously whenís the best time for the biggest discounts? Most shoes release in the late summer early fall to coincide with the new NBA season. Of course Nike has such a huge stable of athletes that they need/can spread out their releases to keep investors happy with a steady stream of revenue quarter over quarter. October is Lebron, late November is Kyrie time, early January is PG, and KD got bumped up finally from summer to April. Adidas basically does Sept October for Harden and December/Jan for Dame. I digress So the biggest discounts and coupons typically come during Black Friday (Thanksgiving time with discounts 20-30% on almost anything. Dickís will sometimes do a 40% off one item around this time as well. Iíve found that Ebates BeFrugal also bump up their cash back so Iíve seen 35-40% total discounts very early on in the sneaker cycle). If you donít have a cash back account from some company like Ebates or BeFrugal, do yourself a favor and sign up. Iíd post a referral link but Iím really too busy to find it). After Black Friday, post Christmas and New Years have big sales as well since retailers want to get rid of inventory to save on taxes just like car dealers. Expect almost as generous coupons and discounts as Black Friday. After this, almost every major US Holiday gets a coupon attached to it: Easter, Labor Day, Memorial Day, graduation days, July 4th. Usually these are 20-25%. So based on sales, release dates and price decay,†your best time to buy is SUMMER.†Take your pick but you have a nice three month window with the NBA Season finishing up, Memorial Day, semi Annual clearance sales, Labor Day and back to school. That even gives you spring chickens some time to save up during the summer. July 4th is around the corner letís see what coupons that bringsÖ Happy hunting!
08 September 2019 Permanente link Google Feed MSN Reporter


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