Enter the characters you see below Sorry, we just need to make sure you're not a robot. For best results, please make sure your browser is accepting cookies. Type the characters you see in this image: How much does Nike actually spend on a pair of sneakers that retails for $100? Answering that is Matthew Kish of the Portland Business Journal, who got a chance to look at a breakdown of production pricing as part of a workshop for the University of Oregon's new Sports Product Management Program. The new program will likely benefit from plenty of Nike insight–it's headed up by Swoosh veteran Ellen Schmidt-Devlin and the brand has always been happy to give back to the school where it started. The information comes via Steve , Nike's Director of Global Transition Management. Nike's average costs for a $100 shoe Sea Freight and Insurance Landed Cost (57% of Revenue) Mark-up (43% of Revenue) These figures are of course based on averages, as costs on production for vary based on materials.

According to this chart, it costs Nike an average of $28.50 to make a sneaker that will retail for $100. That sneaker to wholesalers at $50, meaning Nike will get back $21.50 (the profit on this comes to $4.50 after SG&A and taxes). This cut for Nike will of course increase in their direct-to-customer channels of retail.The requested URL /US/en_US/?l=shop,download_catalog was not found on this server.When I was growing up, sneakers were ubiquitous, unbranded, ugly and cheap. Kids loved them because they were so easy to run around in, and parents loved them because they saved wear and tear on your “real” shoes. But over the years, the lowly sneaker has morphed into the designer athletic shoe, and in the process, given birth to a whole new category of what economists call “luxury goods.” No company has benefited more from this fashion trend than Nike, which reportedly controls one-fifth of the global athletic wear market. Nike’s most famous brand is Air Jordan, named for the equally famous Michael Jordan, who led the Chicago Bulls to six NBA championships in the 1990s and is generally credited with being the greatest player ever to play the game.

In February, Nike began releasing a series of “retro” Air Jordans, to celebrate the 20th anniversary of earlier models. The “Powder Blue” Air Jordan 10 hit retail stores in late February; first day sales reportedly topped $35 million worldwide. Air Jordans are manufactured in China and reportedly cost Nike a bit more than $16 a pair. The Air Jordan 10s are listed on Amazon for $250 to $550 a pair, depending on the style and color. If that strikes you as a rather hellacious markup, welcome to the world of “luxury” goods, where the selling price is determined not by the cost of the goods, but by the status that buyers think they confer. Psychologists tell us that there are two main reasons why we buy luxury goods, even when many of us really can’t afford them. The first is called “signaling” — using luxury goods to “show off” and send a clear signal that you measure up to your peers, or to others in your community. Similarly, we often purchase luxury goods to “mark” significant accomplishments in our lives.

The second reason is triggered by moments of low self-esteem. As a recent article on luxury goods in Time Magazine put it, “when you’re experiencing low self-esteem, you’re more likely to feel a stronger desire to acquire high-status goods ...”nike mens shoes outlet So, it would seem that no matter whether you are feeling way up about yourself or way down, you are likely to treat yourself to a pair of Air Jordans that you probably don’t need and maybe can’t afford.adidas shoes uk size chart Beyond the gaudy prices, there are a couple other hidden costs attached to buying MJ’s latest shoes. nike tennis shoes pinkFor one thing, spending on luxury goods doesn’t flow back through the economy the way it used to. running shoes ratings 2015

Nike’s stock, for example, has tripled in recent years. But since the wealthiest Americans now own 90+ percent of all common stocks, they take home nearly all of the gains when stock prices surge.clarks shoes uk sale mens On the other hand, people in the middle class and working class have to rely on the growth of good jobs for their financial well-being. caterpillar shoes for sale in ukUnfortunately, buying overpriced shoes from Nike does not payoff in jobs either. Nike imports all of its shoes, and, consequently, employs a lot fewer American workers per dollar of sales than most large companies. So, from our vantage point, buying luxury goods tends to make other people rich and over-rewards CEOs — Nike’s Mark Price has earned $61 million in just the last three years. Buying luxury goods usually undermines American jobs, since almost anything you buy instead probably entails a lot more home-grown labor.

In professional sports, athletes often re-up their contracts with the team that gave them their start for less money than they could get elsewhere. It’s known in the sports business as the “hometown discount.” If Michael Jordan and Nike want to continue selling us Air Jordans at outlandish prices, then perhaps they should take a little less in profits and hire American workers to make the shoes that they sell in America. It could be their way of giving the home team a hometown break. Terry O’Keefe is a longtime guest contributor to the Citizen-Times and is a “recovered” politician.PBS' Newshour did an in-depth investigation into the economics behind modern sneaker culture and developed a very long and in-depth infographic on the industry. Among their findings was a shocking number ... well, some people might find it shocking. Michael Jordan made just over $94 million from contracts in his NBA career.  Last year, his ties from Jordan Brand netted him $100 million:

Jordan's finances were recently disclosed in a court case, and surprise, he makes an obscene amount of money, over a decade after he retired. The fact that he pulls in more per year than his playing career seems crazy ... until you put it into context. Let's go ahead and throw out inflation (Jordan's $4 million salary in 1994 would be over $6 million today). Jordan also entered the league in 1984, when the league was just beginning its largest profit expansion in its history. Were Jordan, with his talent, to enter the league today, he'd start off higher. Jordan, as a No. 2 pick in 1984, had a salary of less than a million, Karl Anthony-Towns will make $5.7 million this year with the Minnesota Timberwolves. Jordan topped out at $33 million in 1997 before the salary cap was instituted, but his first deal off his rookie contract started at a measly $2 million. He'd be looking at between $15 and $20 million in today's market. Jordan also played for Jerry Reinsdorf, and the tense negotiations between Jordan and Bulls ownership was detailed in Playing For Keeps by David Halberstam.