nikedealer
Banned
- Mar 10, 2011
- 1,615
- 171
Ayi... you are correct in some aspects but let me correct a few points..unfortunately Sneakerheads are NOT nikes targeted demographic...sneakersheads make a very small and insignificant impact to the overall bottom line at nike...it's a necessary evil in that it does build buzz for a line but trust..Phil Knight isn't keeping the private jet fueled on what NT wants needs or desires...
I read a report a few years ago, and I could be mistakin it's been so long, but the best selling product in the Nike line was the Cortez (or possible the AF1 can't remember) its not because of limited this or camp out that or resellers...it's cause these sneakers appeal to all demographics and more importantly there are no geographical biases...some little kid in Topeka Kansas got some beat down Cortez in his closet...and his mom buys him a fresh pair once a year...
Again...Nike is a wholesaler...yes they do have direct to consumer retail available...but the bulk of its business is done with FTL Corp..FNL Corp..Sports Authority... Even Federated (Macy's etc) is there customer....when they adjust the price it's cause THEY buck...not us...and yes part of it is they are unsure of there margins now if they have to pass the increase on...but went put in prospective....And I've said this before.. whole sealers don't make money on Corks... They make a KILLING off the fitted hat, socks, and tee that MATCH the corks....(and possibly those kicks for the wife or kid on the way out so you don't feel bad about dropping $300 on kicks for yourself)
Corks, limited, whatever...it's just to get you in the door...
In the last 5 Years Sneakerheads or the Energy releases have started making up a LARGE portion of different signature lines.
Since the HoH inception (and its some what lack of execution on the concept) Sig lines have done well across the board on limited releases..
Just imagine... 15 colorways released on a semi limited basis giving every store a two size run limit except for larger stores. This beats out doing 3 or 4 colorways on a much larger distrution of 4 to 5 size runs per store.
Although the Bron line has become somewhat saturated with colorways its giving options plus the Digital Division making money on NikeIDs.. Thats pure profit. 55 percent for Basketball 45% for Digital which Nike keeps all of it.
Now NSW is making money on the Corks as well. That isnt going to Nike Basketballs bottom line. So you have different divisions competing for dollars on the same signature athlete.
Nike Cortez used to be a California shoe, just like AF1 were (to avoid a DC/BMore/NYC argument) East Coast shoe. Both have popularized into cross regional shoes. Just as the Foamposite has.
Nike also makes a ton of money on their "Basement" Division which sells to stores such as *****, Modells, Kohls, and other non traditional Sporting Goods stores for families. This is where you will see take Downs and shoes such as the infamous "Monarch" which has sold almost more than any other shoe in Nike's History. Designed by Jason Mayden.
While you are right on the biggers buyers such as FTL and FA balking at prices they also get to RTV shoes unlike other buyers... so if it doesnt sell they can return it and get a credit it.
Some mom and pops cant afford to risk high inventory so they dont buy everything offered and Nike either doesnt produce it or lowers the price.
This is based on Consumer demand and prior buying habits on particular models. Ex: Zoom BB was a great shoe in booty colors.. Didnt do well so Buyers didnt want to touch the BB2 at high numbers... making the BB1.5 a Euro only release due to it being a Euro inspired shoe. If that makes sense.
As to your point of using Corks to get you in the door. This is a practice heavily used at Nike.. but its to get recogniztion of not only other limited or almost limited shoes but inline (general released shoes).
I think for the most part you made a lot of good points.. but Id hate for some folks to think thats the exact way it goes down.
Each One Reach One Teach One I say...