Handout: Athletic Footware Value Chain
Athletic Footware Value Chain
In China:
- $15.67 materials
- $2.59 direct factory labor
- $4.56 indirect factory labor and overhead
- $1.90 factory capital and entrepreneurial profit
Price leaving China: $24.71
In the Pacific:
- $3.88 shipping and transport
Price landed in Oakland: $28.59
Cost of goods here in the U.S.:
- $0.76 Warehousing & distribution
- $0.38 Royalties
- $0.27 quality assurance
- $0.23 research and development
- $0.38 other costs of goods sold
Final cost of goods sold: $30.62
- $12.90 Sales, etc.
- $1.75 Corporate overhead
- $2.56 Corporate taxes
- $4.21 Interest and profit
Value at wholesale: $52.03
Retail sales costs: $47.97
Retail price: $100.00
UPDATE: Source: Katherine McIntyre and Ezra Perlman (2000), "Nike: Channel Conflict' (Stanford): https://gsbapps.stanford.edu/cases/documents/EC9B.pdf.
