Guesstimate of Manufacturing Cost?

[mskim61]

Finally had a chance to break away and go to DSW Shoe Warehouse today. I found a pair of Michael Kors pumps at DSW discounted price of $120. This shoe was also all leather-upper, insole and outsole. The big surprise was I found these in the clearance section for 70% off. This cut $84 off the price. Then there was a special sale on clearance items, another 30%, which took another $12 off the initial price. My final price $24. Who made any money on this deal? So a factory made the shoe, sold it to Michael Kors, who resold it to a shoe store, who then resold it to DSW, who then resold it to me for $24.Gets one thinking aboutwhat the real cost of manufacture is.

[Phoenix]

I love DSW for that very reason.

[Dr. Shoe]

What happens is, the factory made perhaps 200,000 pairs for MK for all of their outlets worldwide at a cost of perhaps £20 per pair. That's £2,000,000 of which their profit would have been around £300,000. After distribution costs, overheads and supply costs such as import tariffs and duty the cost will have risen to around £30 per pair or so, of which the transport company's cut would have been around £1,000,000 of which they would make about £10,000 profit. The cost of putting the shoes on the shelf could be as much as £5 per pair in terms of shop overheads, perhaps a lot more on the grounds that a quality brand might only sell a few pairs per day, in Charles Jourdan we sold fewer than 50 pairs per day which had to keep a manager, a cashier and 6 sales staff in salary not to mention rent, taxes, lighting, heating, a lady to do the window twice a week etc. So £15 per pair would have been more like it, that's now £45 per pair. The original discounted price in DSW was $120 or £60 or so which only leaves a profit margin of £15 or so but in the original store they were probably about $220? or £110. Now here's the thing, at the end of the season they will have had about 1000 pairs or so left over, they've already made a good profit on the 99,000 pairs that went for full price so rather than throw them away they probably sold them in bulk to DSW for £5 per pair...

[Guy N. Heels]

Or another way to look at it is essentially the same scenario with a slight twist: All the shoes went to Macey's and they sold all but 10% of the shoes. Now the cash register is full and each store has say 10 pairs of shoes on hand (probably in odd sizes that are always difficult to sell) so the head office puts out a directive to put the remaining shoes on the clearance shelf and sell them for whatever they will fetch. In reality anything that sells is pure profit! The store gets rid of the slow-moving merchandise and makes room for the new stock that's coming in, the sales figures go in the store's profit margin, and the lucky customer who was willing to wait nabbs the bargain and goes home happy as a butcher's dog . It's a win-win situation. Since most guys have big feet that, at best, would be in that category of slow-moving shoes - the end of the season is the best time to shop because if you can find shoes or boots that will fit you can most likely have them for a song (and/or a few farthings).

[Dr. Shoe]

Exactly what I was saying except that the big sizes go so quickly because the industry hasn't caught up with the idea that girls' feet are getting bigger... Couple that with Ebay traders looking for a profit and...

[Aly]

I've been gone a while but recently returned - actually the IT folks had this site blocked for a while, but it appears to be back now! - anyway, last year I bought a pair of boots at Kohl's - the price tag on the boot, and printed on the box was $78.99. But they were marked down to $15 so I figured it was a pretty good deal. When I got to the checkout I found out they had been marked down another 75% - I ended up paying $3.75 for them! How's THAT for a good deal?! Aly

[Guy N. Heels]

...last year I bought a pair of boots at Kohl's - the price tag on the boot, and printed on the box was $78.99. But they were marked down to $15 so I figured it was a pretty good deal. When I got to the checkout I found out they had been marked down another 75% - I ended up paying $3.75 for them! How's THAT for a good deal?!

Aly

And right there is the main point I've been trying to make for the longest - the sticker price on the box doesn't mean a thing, it's how much money changes hands at the cash register.

Brilliant buy!