AN IMPORTANT LESSON IN SNEAKER ECONOMICS BY ADIDAS
Ever wonder how much it actually costs to make a pair of Adidas shoes? Well, we have all the answers here, which may or may not surprise you. Actual production cost of an Adidas is a fraction of the final retail cost. According to Sole Review, the actual production cost of a pair of Adidas Yeezy 750 shoes is $76 then is retailed for $350 USD. 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. The numbers you see below are the FOB costs for specific shoe models, based on 2017 ocean shipping data. Publicly available US import data does not contain itemized FOB costs, nor is the database current/comprehensive, so we had to compile the data from international imports and exports. Hence the variation of 5% due on the account of currency conversions to the US dollar. (Check out the images for details. According to "SOLECOLLECTOR.COM/WHAT -DOES-IT-COST-TO-MAKE-A-RUNNING-SHOE, the actual freight-on-board cost, or the cost of the sneaker at the time that it is placed on a shipping vessel, for the adidas Yeezy Boost 750 is $76. The $76 number solely represents the raw production cost of the sneaker in it's country of origin. The dollar figure does not represent anything passed the point of production which included the actual shipping of the sneaker to it's origin, customs duties, taxes, marketing, endorsement deals, retail markup, etc.
At face value, it looks like adidas is making a killing on the yeezy boost but at the article goes on to point out, once all other costs are accounted for, adidas is making $2 profit per $100 sneaker.