Liquidating a non profit
An apt analogy would be to equate your salary to the retail price of a shoe, and your minuscule savings to a brand’s net profit after tax.
Last year, adidas made a paltry 4.1% in net income (read footnote #1) after taxes, and Nike made 10.7%.
Curbstoning is the repeated, unlicensed “flipping cars” for profit.
Curbstoners are people who buy and sell vehicles without a license.
The individual costs mentioned here are 95% accurate, and are factory or ‘ FOB’ costs.
FOB is short for ‘Free-on-board’ (also called freight-on-board at times), which is the cost of shoe when loaded on the vessel at the port of origin – usually in the country where the factory is located.
That allows us to tie in other calculations to the cost of the shoe, and deduce the average profit made by brands on each pair. In the absence of any context, this infographic seems obscene. But that is as good as looking at a person who earns a salary of 0k a year, and say, ‘200k a year?
A shoe (adidas Energy Boost 3) which sells for 0 costs to make? That guy can save a million dollars in 5 years.’ That makes no sense, does it?
For that reasons, we do not have individual BOM’s and costing sheets. We chose 22 shoe models from adidas, Asics and Nike, and the infographic which follows shows you what it cost to make each one of them.
If a shoe is available is sizes US 6-13, then the cost mentioned will be for the mean/median sizing, say a US 9 for men’s footwear.
So regardless of whether a brand is buying a US 11 or a US 7 for a specific shoe, the cost will stay the same across sizes.
We looked at the average cost of different colors across a single model, because factory costs differ based on the color.
It must be mentioned that individual sizes do not have their own FOB costs.