SNEAKERS Q & A - THE ONLY STUPID QUESTION IS THE ONE YOU DONT ASK.

What was the question?

perhaps my view is too simplistic, but given that Nike, yes, is a business, wouldn't they be better off making and selling more?

I get  the whole "it limited, so people will want it more" but makeing is so limited and hard to get that the resellers make more than nike did and a pile of peeps are pissed off, just seem dumb.

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yeah bro Quazza, wish it was that simple in the old days the distribution allocation is proportional across the board. the bigger chains get more, mom & pop get less. everyone has a share of the pie. i could walk in a mom & pop store in campsie buy the jordans i want. if sold out go to rebel.

thanks bro angelfunk. i read a few bits about the NRG bit but first time learned that its Gentry's baby. sadly i think its another marketing ploy on building a "brand". now all kids will be looking for the NRG on the label just like the craze back in the early nikesb days.

nike dont care once it leave its warehouse straight to the retailers shelves as theyre practically sold in their books. so it dont care about the after sale market as well ie the resellers, unless its counterfiet and it hurts their sales and their image. just look at the aggressive fight done by LV on the counterfeiters.

=k=

In a nutshell shooster its all about marketing.. Bro K summed it up perfectly.
They want you to believe everything is limited/exclusive.. Those are the 2 key words in the modern sneaker world..

Hi have a question. What happens to the shit that flat out doesn't sell? It sits there, then goes on sale, and still sits there...

Does it get sent back to (say) Nike? Does the store pay for it?

well I can't answer the question, but I can provide an example of this outlet mystery. When the Nike Shield pack came out, I went to the Nike store in Sydney Westfields to see if there were any pairs of the Lunarglide 3s left, but they had sold out, and likewise with many other retailers such as Athlete's Foot. However, months later, there was a full size run of the LG3s and pairs did not seem to run out. Mysterious.

nice q bro Quazza. questions we have raised are inter related. i mentioned above, nike change its business model in the supply chain, distribution and allocation of inventory to the benefit of the business trading partners it created.

say nikehq finalised its product line for next year. the licensed distributor eg Nikeoz sends out their sales persons to the retailers to determine xxx number of units to order. nikehq warehouse then ships units to licensed distributor to allocate the stock to the retailers below:

1. buy & sell retailer
2. consignmeny retailer
3. retail arm of official distributor licensee

Q. What happens to the shit that flat out doesn't sell?

1. buy & sell retailer

retailer buys from distributor then sell at msrp. the status of unsold stock is in line with trading contract signed with nike.

a TZ account holder can not mark down the price low enough to move because nike wants to protect its image by price control eg espionage can not markdown sale over 20% i think. so its a catch 22 to have a "TZ" account because you have to move it otherwise it sits there and can not return as unsold unless its defective.

a bigger retail chain however can have a much lower markdown like FL/Rebel where 50% is allowed to move stock. again, they can not return to nike as unsold stock but FL/Rebel can sell its unsold stock to their own outlet.

2. consignment retailer

in emerging economy countries where nike wants a build a bigger market presence, they allow consignment trading. Nike sends goods to a consignment store who pays Nike only as and when the goods are sold. Nike remains the owner of the goods until they are paid for in full and, after a certain period, takes back the unsold goods.

moreover, since nike changes its product lines every three months, Nike needed to remove unsold merchandise quickly from retail stores and move it to Nike outlet stores as the new stock arrived.

3. licensed distributor retail arm

nike hq sends more stock than ordered so the distributor, nikeoz first try to offer them to retailers otherwise these extra stock goes to their retail arm ie nikestore. then any unsold stock goes to the nike outlet. i bet this is how it went down with LG3.

hope it makes sense lol anyway thats how i think it works.

=k=

Last edited by kuyakoy (28 months ago)

kuyakoy wrote:

a TZ account holder can not mark down the price low enough to move because nike wants to protect its image by price control eg espionage can not markdown sale over 20% i think. so its a catch 22 to have a "TZ" account because you have to move it otherwise it sits there and can not return as unsold unless its defective.

a bigger retail chain however can have a much lower markdown like FL/Rebel where 50% is allowed to move stock. again, they can not return to nike as unsold stock but FL/Rebel can sell its unsold stock to their own outlet.

this is not concrete, there is exceptions that you haven't mentioned, and FL are able to return stock in some cases...

what about the different countries allocation of stock, is this sometimes random or strategic also, for instance i remember reading about a jordan release where the number of actual units produced was 10,001. now, 5000 of the shoes were split between all countries that are not USA while the USA received 5001 in total

Funke wrote:

the US is the biggest market for jordans, pretty standard reason.

just imagine australia sitting on 5000 pairs of a jordan release, a majority will hit the outlets or sale bins.

i didnt see any quai 54's in the sale bins, i saw signs indicating where the line was to start... and the USA didnt recieve any of those...