First off, let’s examine some of the costs involved in making shoes. Aside from factory labour and raw materials like leather and rubber, there’s also cutting dyes (up to 20 per shoe), sockliners, plastic logos, packaging, eyelets and laces.
More importantly, there’s a huge investment in creating new shoes which can easily run north of $100,000. These initial set-up costs then have to be amortised across a shoe’s potential production run, meaning brands need to move substantial numbers to recoup their initial stake.Then there’s the back-end that brands are responsible for such as warehousing, office space, hiring designers, marketing gurus, sales guys, customer service and paying LeBron James his own weight in gold bullion every month. The list of expenses is a long one and the headaches merely multiply when little things go awry.
Right now some of those ‘little things’ include global warming, the recent prolapse of the entire financial system, China’s inevitable march to world domination, natural disasters, a patently fickle Gen-Y, online retailing, earthquakes, nuclear meltdowns, geo-political conflict in the Middle East and the potential expiration of the Earth’s oil reserves.
Nothing too major to worry about then...
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