Don't blame tariffs for Nike's price gouging. Same with all other products made in SE Asia.
Profit Margins: Shoe companies typically mark up their products significantly, with retail prices often being several times higher than the production cost.
Examples: A basic running shoe, like the Nike mentioned in the video, might cost around $11 to produce, including materials, labor, and packaging.
-The cost to make a $70 shoe is around $15. -The cost to make a $250 Nike shoe is around $11. -The cost to make a $160 trainer generally costs a retailer $80-90 to purchase. - A high-end running shoe, like the Adidas Ultra Boost, might have material costs of around $40, labor costs of $12, and other costs, leaving a profit of $92.
You’re forgetting overhead costs, shipping/value added tax, paying Nike employee wages, sponsorships, etc. It’s not always as simple as you think it is. Every brand competitively prices shoes similarly
When you have an enormous corporation like Nike, there are far, far more costs involved than simply materials and labour.
You have departments such as sales, marketing, development, operations, distribution and so on. All of which have many employees that need to be paid, as well as physical stores, other real estate and online spaces that require purchasing, rent or rates, maintenance and a slew of other costs. Oh, and let's not forget tax.
Each sale goes towards covering all of these costs, so that additional $92 is not even close to being all profit.
They should charge more though (and invest in better build quality), and then maybe the soles of their shoes wouldn't pull away from the upper, as my pair of Vaporfly 2s did after just 190k, as well as both pair of Invincible 1 and 2s (after less than 100k).
Don't blame tariffs for Nike's price gouging. Same with all other products made in SE Asia.
Profit Margins: Shoe companies typically mark up their products significantly, with retail prices often being several times higher than the production cost.
Examples: A basic running shoe, like the Nike mentioned in the video, might cost around $11 to produce, including materials, labor, and packaging.
-The cost to make a $70 shoe is around $15. -The cost to make a $250 Nike shoe is around $11. -The cost to make a $160 trainer generally costs a retailer $80-90 to purchase. - A high-end running shoe, like the Adidas Ultra Boost, might have material costs of around $40, labor costs of $12, and other costs, leaving a profit of $92.
So start your own running company in the US, undercut them massively, and still make a fortune?
To unpack why consumers are forking over the big bucks to get laced up for marathon training, we dusted off our MBAs and tore into the income statements of Adidas, ASICS and Nike.
When you have an enormous corporation like Nike, there are far, far more costs involved than simply materials and labour.
You have departments such as sales, marketing, development, operations, distribution and so on. All of which have many employees that need to be paid, as well as physical stores, other real estate and online spaces that require purchasing, rent or rates, maintenance and a slew of other costs. Oh, and let's not forget tax.
Each sale goes towards covering all of these costs, so that additional $92 is not even close to being all profit.
They should charge more though (and invest in better build quality), and then maybe the soles of their shoes wouldn't pull away from the upper, as my pair of Vaporfly 2s did after just 190k, as well as both pair of Invincible 1 and 2s (after less than 100k).
I can't believe how blind you are. Nike had a 21 BILLION dollar profit in 2024. That's after ALL expenditures.
There is no good reason that we should allow those companies to fire all American workers and move overseas just to increase profit from 19 billion to 21 billion.
$2/hr in Vietnam or China is like $200/hr in the US. We shoot 10,000 stills per photographer, ftp to Vietnam, within hours it's culled, edited and post on Instagram, facebook,,Tik Tok.
When you have an enormous corporation like Nike, there are far, far more costs involved than simply materials and labour.
You have departments such as sales, marketing, development, operations, distribution and so on. All of which have many employees that need to be paid, as well as physical stores, other real estate and online spaces that require purchasing, rent or rates, maintenance and a slew of other costs. Oh, and let's not forget tax.
Each sale goes towards covering all of these costs, so that additional $92 is not even close to being all profit.
They should charge more though (and invest in better build quality), and then maybe the soles of their shoes wouldn't pull away from the upper, as my pair of Vaporfly 2s did after just 190k, as well as both pair of Invincible 1 and 2s (after less than 100k).
I can't believe how blind you are. Nike had a 21 BILLION dollar profit in 2024. That's after ALL expenditures.
There is no good reason that we should allow those companies to fire all American workers and move overseas just to increase profit from 19 billion to 21 billion.
Imagine thinking that moving all manufacturing of Nike to the US would only make the product $2b more expensive.
$2 is a fortune in Vietnam, India. It's why Nike and others pick South Asia. The prob for Americans is you are a target for robberies, kidnapping, extortion, etc.
I can't believe how blind you are. Nike had a 21 BILLION dollar profit in 2024. That's after ALL expenditures.
There is no good reason that we should allow those companies to fire all American workers and move overseas just to increase profit from 19 billion to 21 billion.
Ahh dude, you understand the difference between gross profit and net profit, right? Sure, gross profit was $21billion...that's revenue minus variable costs (the cost of making/shipping the shoe). But you forget about those pesky things like taxes, R&D, marketing, paying employees, paying your athletes under contracts, buildings....you know, the whole infrastructure of the business....those are called fixed costs you have to cover with your sales too.
Fiscal 2024: NIKE annual revenue for 2024 was $51.362B, a 0.28% increase from 2023. NIKE gross profit for the twelve months ending February 28, 2025 was $20.955B NIKE annual net income for 2024 was $5.7B, a 12.43% increase from 2023.
So after ALL expenses (fixed and variable costs) they made just over 10% profit margin in 2024. Now you want them to bring it back to the U.S.? That will increase their material costs (if it is produced here, or they'll have to bring in from overseas....that will be tariffed), higher employee costs, not to mention having to build out the manufacturing capacity here from scratch ($billions investments). Plus, they're still an international business, so they'll still need to operate overseas as well.
The clothing is such an impossible market to get into since the margins are razor thin. Shoot, if you've ever watched Sharktank you'll hear those investors talk about what a nightmare the clothing industry is and they'll hardly ever invest in startups because it's so tough...and they sharks are the saviors to those young companies because the have the contacts to get stuff produced overseas so it's cheap enough so they can sell it in the US market.
That's why the markets hate these stupid moves by the current admin...it's bad business for everyone. Time you got some glasses "so blind"
Don't blame tariffs for Nike's price gouging. Same with all other products made in SE Asia.
Profit Margins: Shoe companies typically mark up their products significantly, with retail prices often being several times higher than the production cost.
Examples: A basic running shoe, like the Nike mentioned in the video, might cost around $11 to produce, including materials, labor, and packaging.
-The cost to make a $70 shoe is around $15. -The cost to make a $250 Nike shoe is around $11. -The cost to make a $160 trainer generally costs a retailer $80-90 to purchase. - A high-end running shoe, like the Adidas Ultra Boost, might have material costs of around $40, labor costs of $12, and other costs, leaving a profit of $92.
Republicans love to bend over and grab their ankles for big corporations.
Women are lining up on years long waiting lists to work for $2 hour in China and India. They wanna have challenging tasks like making beautiful shoes. Nike marks it up 100x. Everyone is happy!
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