Cheap on labor, excessive on endorsement.
Photo from Justin Hee’s flickr
An elegant, dandy pair of Nike shoes would cost you around $70 to $150. Little did the public know that the production cost, meaning the materials, machinery, and rent that Nike spend in making a pair of shoe, is just $12. More intriguingly, the labor was just $2.75, or just 4% of the money the customers pay for a shoe with a check sign.
Workers in the production factory really earn a little percentage, and quite frankly are underpaid.
Most of the cost of the shoes came from advertisements. Tiger Woods, for instance, was paid $20 Million to promote the Nike golf division alone. In 2006, Nike spent $476 Million to get star-studded promotion of their shoes.
This engagement does not only apply to Nike. Before buying the Shape Ups Skechers shoes Kim Kardashian promotes, think of how much the noted Kardashian milks you some money. Just think of the workers who actually WORK and put together the materials to offer comfort for your feet and how they should get the percentage more. And think of how many hungry people will be fed, out of out-of-school children be educated, and millions of lives be improved when these shoe-makers’ cost of advertisement are focused on providing support for them.
Do they really need advertisements? People already know that Nike makes shoes, so why spend millions on promoting it more? We only have a pair of feet. Everytime we buy more than necessary, remember the children who travel to school using worn-out slippers or barefoot across rocky terraces and cross a river, even rivers.
Do you need a celebrity do endorse your shoes?
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Twelve dollar shoes that sell for seventy dollar and up, that is a moral outrage. It shows how marketing is all that the American economy has become. The big dollars go to the endorsers and the licensed corporate logos, not the actual product designers, producers, engineers, nor employees. Nike is just one example; you can see the it at work on just about everything you buy. How do we create jobs in the US, if the only real game to play is marketing and you are not some celebrity. Distressing to say the least.
Point well made. But what is the solution ? Putting our (people who feel this way) point across through Blogs and other media is certainly one way. The other, and I suggest most effective, way is to “lead by example”. Can we stop buying Nike and Adidas products if we feel they are not good corporate citizens. Will we be able to confidently stand with peers in our unbranded shoes while all others wear Nike and Adidas and others. Lets make a start with ourselves.
Advertisements are used to brain wash the children of each generation. If they keep seeing their favorite athlete supporting Nike, they’ll keep buying them.
We should buy New Balance shoes; they’re the last remaining major U.S. athletic shoemaker.
These are all well made points… It’s a shame that they can’t just make their stuff here and keep more of our people working.
It’s appalling when you put it like that. This (i.e. the fact that the least part of the money for the product actually goes to the people who make it) is one of those things you kind of know, but don’t really think through.
I suspect it says something equally or more disturbing about us – I mean the people who buy the products and are susceptible to marketing based on style and image over substance – than it does about the actions of corporations like Nike that exploit that trait.
After cigarette advertising was banned in the UK the cigarette manufacturers profits actually rose because all that unnecessary expenditure was removed from their budgets. People still bought the same amount of cigarettes even though the adverts had disappeared.
This proves that you don’t really need aggressive advertising to promote known products already. A whole lot of money could be spent on more meaningful things, such as research, product development or more importantly on charity.
Yes, I totally agree with the last item
Very insightful, don’t get caught up in the names. The materials and labor don’t factor into the cost of a pair of sneakers. Sometime you don’t get what you pay for.
Reblogged this on weaponBRAIN.
This is a tough one because I have agreed with your position for years, and I also need very supportive shoes. I don’t support Nike, but I know when I purchase any other brand, I’m likely supporting similar inequities so it’s tough. Recently I realized that if it’s advertised, especially heavily, that we probably don’t need whatever it is. Thanks for the post.
In my household it is a constant battle to overcome ‘brands’ especially with the peer pressure and advertisements aimed solely at my teenage kids. This article give me one more weapon in my arsenal as I fight off the ‘brand craziness’ that many kids (and parents) fall prey to. Always wanting the next best think, not because they need it, but because they have been told that their life would be meaningless without it. My response – Really?
I remember when I paid $50 dollars for sneakers and thought I was being robbed! Haha, now a decent pair of running shoes is at least $100. Companies do spend a boat load on advertisements but I know from experience….they work!
You’re lucky you got a decent sneakers for $50. That’s so rare now, if it still exist. I know, their Ads work, but thing is, we also shoulder the expenditure on ads. Thanks for your thoughts!
Yes we do…the work great at getting people to spend more money on cheap products. I love companies like ING bank that do not advertise as much as other big banks so their customers do not have ridiculous fees. Though they did just get bought by Capital One so we’ll what happens next 😉
Hi there, I found your blog via Google at the same time as searching for a similar topic, your web site came up, it seems to be great. I have bookmarked to my favourites|added to my bookmarks.
I love this post because it shows how people in different parts of the world think about such things..in the 3rd world, you find people who are so happy with so little…in the more fast paced developed world, everyone tries to convince us that we need and indeed want more, much more…
You seem to be a very practical person. that is the image one draws of you. yours posts are very simple and to the point. this one too.