Why Are Nike’s so Expensive?

Nike is one of the largest and most ubiquitous sports apparel brands in the world. With millions of loyal, dedicated followers and consumers, Nike has become a multi-billion dollar brand and regularly posts revenue figures in excess of $37-billion.

And whether you are in the market for a new pair of Nike sneakers or simply looking to purchase a Nike hoodie, you may be wondering, why are Nike’s so expensive?

But fear not!

Below, we are going to review just why Nike’s are so expensive and provide you with some money-saving tips and tricks that will still allow you to purchase that perfect pair of Nike shoes without breaking the bank.

Quick History of the Nike Brand

Nike may be one of the most ubiquitous and well-known brands in the world but the company did not start that way.

Founded in 1964 as Blue Ribbon Sports by Bill Bowerman and Phil Knight, the pair of founders would rename the company to Nike in 1971.

Utilizing the name Nike, which comes from the Greek goddess of victory, the Nike brand evolved to include nearly all sporting events and games, including basketball, tennis, golf, football, baseball, and soccer.

Headquartered in Beaverton, Oregon, the company is the world’s largest supplier of athletic shoes and equipment and has annual revenue in excess of $37.4 billion.

With the Nike brand alone being valued at over $32 billion, it is also one of the most valuable sporting brands in the world.

Why Are Nike’s so Popular?

While there are a plethora of sneaker, sports, and fitness apparel and shoes on the market, Nike remains, by far, one of the most popular choices and options for kids and adults.

But, just why are Nike’s so popular?

Admittedly, much of Nike’s popularity stems from their slick marketing and advertising. Utilizing the iconic “Just Do It” slogan, Nike has become associated with athletes and individuals who are more fitness inclined.

Similarly, Nike has been able, perhaps more than any other sneaker brand, to enlist and recruit the help of superstar players to sponsor their own line of shoes and sneakers.

From Michael Jordan to Kobe Bryant to LeBron James, Nike has signed some of the best athletes in the world and has been able to associate the brand with those superstar athletes.

Similarly, Nike has been able to maintain their popularity throughout the decades by being on the cutting edge of technology.

Utilizing patented technology in their shoes, sports apparel, and sporting equipment, Nike has established themselves as the premiere sporting goods brand and the one most trusted by athletes worldwide.

And lastly, Nike has entrenched themselves into the fitness-tech space.

With partnerships with Apple via their Nike Apple Watch design to their Nike Training Club app which helps individuals meet their fitness goals, Nike has remained front-and-center in consumer’s minds as the one-stop-shop for all things fitness related.

How Does Nike Make Money?

Nike, as a global, international conglomerate, operates a multitude of differing business units around the globe. However, even though Nike has differing business units, the singular focus for all of them is to design, develop, market, and sell athletic footwear, apparel, equipment, and accessories to consumers.

As such, Nike’s differing business units, including Nike North America, Nike Europe, Middle East, and Africa, Nike Greater China, and Nike Asia Pacific and Latin America all strive to develop and create specific pieces of apparel which will attract consumers within their designated geographical region.

However, as all these separate business units all fall under the same global umbrella, there is a wide level of design and style trading, with business units offering tips, tricks, and designs with one-another to assist in the overall profitability of the company.

So, Why Are Nike’s so Expensive?

Below, we are going to review the key reasons as to why Nike’s are, and have recently become, so expensive.

However, before jumping into the nuances of Nike’s pricing structure, it’s important to understand that in 2022 and going into 2023, global supply chains, the recent pandemic, and soaring inflation have all contributed to the price increases in Nike shoes and apparel.

While many of these headwinds may be temporary, they do help to explain Nike’s recent price increases and moves to increase the cost of goods sold.

• Sneakers Are Becoming More Expensive – as stated above, and to reiterate, the cost of sneakers and apparel in the United States is increasing due to supply chain constraints and soaring inflation rates. Per the U.S. Bureau of Labor Statistics, the cost of men’s shoes has increased 5.5 percent, women’s have risen by 4.9 percent, and kids’ shoe prices have climbed by 11.9 percent.

• Increase in Retail Wages – with the so-called “Great Resignation” currently being felt, many retail stores are simply unable to find, attract, or maintain the necessary levels of store employees to maintain their business needs. And, as reported by Fortune, nearly 4.4 million American’s voluntarily left or quit their jobs, forcing retailers to increase wages to attract and maintain current staff. This increase in wages moves, naturally, downstream to the end consumer who winds up paying more for goods and services.

• Global Shortage of Rubber and Plastic – similarly, and exasperating the issue, are global supply chain issues with both rubber and plastic. Both rubber and plastic are main components used in the manufacturing of shoes and their shortage will increase costs until the issue can be resolved.

• Nike’s Are Popular – an explanation as to why Nike’s are so expensive without looking into recent global supply chain woes or the pandemic is, quite simply, that Nike’s are popular. And due to their popularity, Nike is able to, quite simply, charge a premium for their product. With millions of consumers continuing to choose to wear Nike products, Nike is able to keep prices artificially high without impacting their corporate bottom line.

• Nike Spends a Fortune on Marketing and Advertising – as a global company and one of the most recognizable brands in the world, Nike goes to great lengths each year to ensure their brand is remembered and associated with an athletic lifestyle. However, doing so is not cheap. Reportedly, Nike spend over $3.59 billion annually on advertising and marketing spend to maintain a competitive edge and appears to have no plans to scale back that spending.

• Nike Signs Big-Name Sponsors – in a similar vein, Nike also spends millions each year on athlete sponsorships. From LeBron James to Michael Jordan to Wayne Rooney and Landon Donovan, Nike pays big-name athletes tens of millions of dollars for their sponsorship and support and must increase their costs to recoup that initial sponsorship investment.

• Resale Market – an unintended consequence of Nike’s popularity is, perhaps, the 3rd party reseller marketplace. With marketplaces like StockX and GOAT, consumers are able to purchase exclusive, limited-time designs from Nike and make over a 100% profit by re-selling those sneakers on 3rd party sites. With the influx of 3rd party reselling sites, more-and-more consumers are looking to get their hands on popular, limited-time designs to resell.

• Nike Invests Heavily Into Technology – and lastly, Nike is not only a shoe and apparel brand but also one that invests heavily into technology. From their apps to their patented shoe technologies, Nike spends heavily to remain on the cutting-edge. However, those costs will need to be recouped and often fall directly on the consumer via higher priced merchandise.

How to Save Money on Nike’s?

While Nike’s, and many footwear brands, have increased in price in recent years, there are some steps you can take to save on the cost of a new pair. While you may not see 50% off sales, you will still be able to save a significant sum and can help to not break the bank.

• Nike Outlet Stores – if you’re looking to purchase a new pair of Nike shoes or Nike apparel and gear, be sure to checkout the Nike outlet stores. You can lookup Nike outlet stores directly and one’s near you via Nike’s website, simply by inputting your zip code and filtering by “Factory Store”.

• Nike Sale Site – similarly, Nike offers frequent sales on new shoes and apparel directly on their site. However, be sure to check often as shoes and apparel are bought quickly, often leading to popular shoes selling out.

• Sign-Up for Nike’s Mailing List – in addition, Nike will email followers exclusive coupon codes and discounts if you join their mailing list. With some coupon codes amounting to 25% off, you can definitely save a few dollars via this easy method.

• Check Other Retailers – and lastly, don’t be afraid to shop at other national retailers for Nike products. With Target, Amazon, and Walmart all having direct relationships with Nike, many of those retailers will offer discounted items towards the end of the season or during major, national holiday’s.