Why Nike Sells $310 Soccer Shoes

Companies and Brands

Published: November 21, 2015 9:10 am

Last Updated: January 13, 2020 4:55 pm

Nike Inc. (NYSE: NKE) holds the spot of the world’s premier maker of athletic shoes. As part of that position, and the universal nature of its brand, it has a great deal of price leverage. A prime example of that is its $310 soccer shoe.

Some of the largest athletic shoe companies in the United States do not sell soccer shoes at all. Reebok is an example. While it does not have the marketing power, or money, to attack every part of the sports shoe market, Nike does. On the other hand, German shoe maker Adidas has soccer shoes, with cost as much as $240, about 75% of the most expensive Nike.

Is the Nike soccer shoe better than the one made by Adidas? Adidas has a huge footprint in the soccer world. Like any other company, it would use that presence for price leverage. That leverage caps at $240.

Nike’s brand power is most evident in its line of Air Jordan basketball shoes, as well as Kobe shoes and LeBron shoes. Nike invests tens of millions of dollars, if not more, in endorsement deals with two of the best NBA stars, and Michael Jordan, probably the sport’s greatest player, though he has been retired for two decades. Nike still sells a $175 Jordan basketball shoe. Presumably it is not just a marketing tool. People actually buy them.

Nike markets itself as a growth company, despite its size and market share in the athletic shoe market. The claim may be an exaggeration. Nike’s revenue rose 5% in the most recently reported quarter to $8.4 billion. Yet net income rose 23% to $1.18 billion. It is a growth company, if measured by the bottom line.

It is absurd to think that, in a market in which good soccer shoes sell for $150, Nike could offer one for double that price. But the high pricing is a sign of brand power. It is brand power that allows Nike to outrun its most direct competitors.

ALSO READ: Merrill Lynch Says Buy These 2 Hammered Sports Apparel Giants Now

Are You Still Paying With a Debit Card?

The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.

Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!

Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!

Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.