How much does it cost to make a shoe? While we get questions like this all the time, we’re not able to answer them because it really depends on the shoe and what materials are used. So we thought it would be cool to break out some examples of different shoe models and give you an idea of how much the construction costs for each one.
Making a shoe is an extremely labor-intensive task, with many hours of hard work, craftsmanship, and cutting-edge technology involved. While it’s easy to get excited by the price of a shoe, it’s important to think about the materials that went into making them.
Let’s talk in-depth about the cost of materials to make a shoe first, shall we?
Table of Contents
- 1 What’s the Cost of Materials to Make a Shoe?
- 2 What’s the Average Cost to Make a Shoe?
- 3 How Much Does it Cost Nike to Make a Shoe Now?
- 4 How Much Does It Cost Adidas to Make A Shoe Now?
- 5 How Much Does It Cost To Make A New Balance Shoe?
- 6 How Much Does It Cost To Make a Gucci Shoe Now?
- 7 How Much Does It Cost To Make a Shoe in China Now?
- 8 Conclusion
What’s the Cost of Materials to Make a Shoe?
It’s no secret: the footwear industry is fast-paced and competitive. For a brand to succeed, it has to deliver unique products to its target market at an affordable cost.
That’s why it’s important for footwear brands to get the cost of materials to make a shoe right from soles, to midsoles, uppers, and laces.
When a shoe designer starts working on new shoes, or a product manager begins to formulate a new line plan, they will usually have an overall vision of the shoe.
So what should be considered here first and foremost?
First of all, you need to avoid making shoes that are over or underpriced — as that will lead to low sales. You also need to make sure that all the components are within duty-free categories so that there are no customs and duties on top of costs.
That’s why you need to know the shoe manufacturing costs and what the different types of parts are called. A quick breakdown of the main parts of a sports footwear product can be seen below.
Shoe Materials List:
- Upper Stitching $0.04
- Outsole #67-w34 $1.50
- Toe Box .8 Syrlin $0.03
- Cement & Thread $0.50
- Outsole Lamination $0.50
- Lace 8mm Flat Lace $0.20
- Quarter logo ACTION $0.15
- Heel logo Screen Print $0.15
- Collar Foam 20mm KFF $0.13
- Inner Lining 180g Cosmo $0.12
- Tongue Foam 20mm KFF $0.13
- Insole 1.5mm insole board $0.09
- Tongue Logo Woven Label $0.03
- Heel Counter Suede Leather $0.69
- Quarter/Eye row Suede Leather $.85
- Counter PVC injection Counter $0.10
- Tongue Straps 40mm Elastic $0.13
- Midsole Two color wedge EVA $1.50
- Standard shoe packing is around $.77
- Sock liner Standard molded Eva $0.85
- Eye row Reinforcement Supertuff $0.03
- Collar 220D Nylon +4MMKF329+24GT/C $0.20
- Tongue 220D Nylon +4MMKF329+24GT/C $0.15
- Quarter 220D Nylon +4MMKF329+24GT/C $1.20
- Collar Lining 180G PU +4MMKF329+24GT/C $0.28
- Tongue Lining 180G PU +4MMKF329+24GT/C $0.12
- Toe Cap Suede Leather $0.82
- Vamp MESH+4MMKF329+24GT/C $0.16
What’s the Average Cost to Make a Shoe?
Shoes are more than just materials — they’re an art form. Whether you’re a shoe designer, a salesperson, or a customer, it takes effort to put a pair of shoes together and have them come out the other side looking top-notch.
Once the parts above are put together, some shoemakers claim that each shoe will take about an hour to make, while another 30 minutes are spent on quality control. Give some more time for prep and other odds and ends, and you can expect a pair of shoes to take about two hours to complete.
Labor Cost
What do two hours of work mean? Well, this number can change significantly depending on where the factory is located.
Factories in the U.S. are much more expensive. They cost an average of $38/hour for skilled labor, benefits, and payroll taxes included.
In Spain, the average hourly wage for shoe manufacturing employees is $22 but benefits and taxes are included in the calculation.
In China, it’s harder to find data specifically on shoes, but it seems like $5.51 an hour may very well be a good approximation of the average wage there.
The labor cost to make a shoe can fluctuate depending on a number of factors, such as the quality of materials and the origin of the product.
The average cost to make a shoe — a Chinese-made one is $11.02, while it’s around $76 for an American-made shoe.
Consumer Experience
Shoes need to be sold in order to be profitable. People want to try shoes on, and they also want to see them in person before they buy. Finding a good balance between online sales and brick-and-mortar sales is the key to success here.
First, brands need to create an online store and make it their advertising hub. There are many companies that offer e-commerce solutions at competitive prices, so brands need to do a bit of research before making the choice.
You can expect to spend between $326 and $1,728 a month, depending on its size. It’s more cost-effective to outsource a website to a freelancer or company, so focusing on this first is important.
There are also a number of other expenses you might want to consider. How will you track deliveries? Where will you get your packing materials from?
It’s important to think ahead and plan for all of these potential costs, which may present themselves in unexpected ways.
Once you have that up, the next step is to start traffic generation through a combination of online marketing strategies. If you choose to advertise on Instagram, make sure that you have a conversion goal of around 15% for each click.
You can expect to spend more or less $20 for each sale that you make on Instagram.
There are plenty of other ways to market your shoe product, such as sponsored posts, Google Adwords, and giveaways. But it all depends on how much you want to spend and what your goal is.
Last but not least, the shoes need to get to the customer. Shipping with USPS Priority Mail, $15 is about average.
Of course, you won’t know whether someone will like your product until they try it on, so there’s always a chance that some customers will return their shoes.
If a buyer returns an item, most businesses will need to eat the cost for sending the items back (though this can be mitigated with free returns).
Total Average Cost to Make a Shoe
Say, if we were to base the cost of materials to make an unbranded sports shoe on what we’ve discussed above. We should have around $11 to $20. The assembly should be around $11 to $76 (Factory/Machinery not counted).
And, Advertising + Shipping = Consumer Experience. That’s $20 + $15 = $35.
At the end of the day — when all costs are factored in, stitching an average unbranded sports shoe falls between $57 and $131. This doesn’t include any machinery, physical storefront or a website, profit, or returns for the company.
The final price is largely dependent on the brand and whether or not they can pass along costs, but given the materials utilized, I’d expect that a pair of shoes retail for around $300.
Considering the fact that a majority of retailers charge 25-50 percent commission for sales, as well as the opportunity to find these products on sale or as seconds for well under $500 shipped, this might be a pretty good deal after all.
How Much Does it Cost Nike to Make a Shoe Now?
When it comes to the cost of sneakers, there’s a lot of confusion. Even sneakerheads who know better can’t give you the full breakdown of what goes into designing and producing a $100 pair of Nike Dunks.
Numerous sneakerheads are so misinformed that they think they know how your sneakers are priced. They’ll even tell you it’s easy to break down the cost of a sneaker.
Some would say, “Nike’s cost to make a shoe is only $3. They’re selling it for $100 . . . they’re price gouging! We’re getting ripped off!”
But that’s not the case. For a $100 Nike shoe, the cost breakdown isn’t as simple as it seems. So how much does it cost Nike to make a shoe that’s priced for $100 for example exactly?
How the Money is Spent
The graphic shows the profit share breakdown of a typical footwear manufacturer and retailer.
If you consider, for example, Nike’s full-priced $200 LeBron James sneakers, 50% of the final retail price goes to the retailer. Having such a large share in the industry is completely normal for old-school retailers.
Nike gives retailers a 50% discount off of the suggested retail price.
If we use the same math, we can calculate that the average company will pay $40 for every pair of sneakers they buy at wholesale prices. Although we use these numbers as ballpark figures, this does not mean that every sneaker will retail for $100.
Nike can sell shoes directly to customers at a lower price, giving shoppers a massive incentive to purchase from the brand directly. In fact, Nike is so confident in its ability to deliver quality products that it even makes special sales exclusively available on SNKRS or at Nike.com.
$100 Nike Shoe Cost Breakdown
With a total cost breakdown of $28.50, the average markup of a Nike sneaker is $21.50 on every $100 sneaker. Nike makes approximately $4.50 in profit per sneaker after investing in research and development, paying taxes, and administrative costs.
While these numbers are accurate, they are subject to change.
- Firstly, the cost of raw materials used in the production of the product will change.
- Secondly, the cost of shipping and labor will change, as well.
- Thirdly, competitive advancements in technology will influence costs.
We consider this breakdown an acceptable estimate, but it’s certainly not perfect. Some of the priciest shoes on the market (think: Nike Adapt BB or Nike’s Foamposite) will have wildly different costs.
With that in mind, this data can provide a general template for understanding how much does it cost to make a shoe, particularly how much does it cost Nike to make a shoe.
How Much Does It Cost Adidas to Make A Shoe Now?
Investing in a pair of Adidas shoes could be a costly endeavor.
However, it may not always be entirely accurate to consider the retail price when factoring in production costs. This is primarily because the sports giant and one of the world’s largest footwear manufacturers use vastly different materials and production techniques to make their products.
So how much does it cost to make a shoe from Adidas that’s priced for $100? Find out below!
The Manufacturing Costs
The manufacturing stage, where initial drawings are translated into a working, retail-ready product, is the most demanding for brands. It’s also the point at which many people question whether designer shoes are worth their high price tags.
The truth is that, while only about 20% of the shoe’s final cost comes from this stage alone, it doesn’t account for all of the money spent to get it to market.
The Shipping Costs
Although Adidas does ship most products from independent factories to major Western markets, there are some costs that the brand pays for in these transactions.
Because the items are being made in areas where labor is more affordable, many production prices are lower than those of American and European factories. However, the cost of international shipping still has to be considered.
For every pair of Adidas shoes that sell for $100, the company pays roughly $1 in transportation costs to ship the shoes to buyers.
Customs Fees and Duty & Landed Costs
Every shoe that Adidas imports costs the company $20 in manufacturing, shipping, and other fees. On top of this, the brand has to pay a $3 per pair customs fee and $1 per pair in shipping fees — a total of $24 for every pair of shoes it imports.
The Company’s Markup
When a customer buys an item from Adidas, it’ll amount to a 43% to 56% markup on its revenue. This markup is enough to cover the company’s operational costs and still maintain great profits.
After this, it’ll sell the shoes to wholesalers/retailers who in turn will sell them to customers for $50.
Retailer Price
Retailers purchase sneakers from Adidas at $50 and add a markup to the final price. This means that if you buy shoes for $100, the retailer only pays $50 to buy the shoes.
How Much Does It Cost To Make A New Balance Shoe?
New Balance is one of the most recognizable names in sneakers, a classic American brand built on over a century of tradition.
With five manufacturing facilities across the East Coast, New Balance’s commitment to crafting high-quality shoes in the US hasn’t wavered — they still make over four million pairs a year.
Instead of depending on overseas manufacturers to produce their shoes, New Balance manufactures many of its own components in the US. This means that over 7,000 Americans have jobs at New Balance facilities across the country — with more than half of them working in Massachusetts alone.
The cost to make a shoe, US-manufactured New Balance shoes, is somewhere around $150 to $200. Shoes made outside of the US are generally cheaper because manufacturers can pay lower labor wages.
According to New Balance, this is a price range that’s “in line with equivalents in our imports line-up” specifically because manufacturing in the United States is significantly more expensive than overseas.
How Much Does It Cost To Make a Gucci Shoe Now?
When it comes to top brands like Gucci, pricing is not a very straightforward concept. With price hikes now reaching as high as 15% of the product cost, buyers can’t help but wonder how much to expect to pay for a brand-new pair of designer shoes — and more importantly, what part of your money actually goes into making these shoes.
Material Cost
Products made from rare materials are much more expensive than those made from more common materials because these materials are harder to get.
Gucci products made from rare fabrics mix with other expensive features, like gold hardware and leather trimmings, to give them the price tag they have.
Labor Cost
Gucci has manufacturing facilities located in Italy, where they take care to cut their materials into non-standard shapes. This practice is costly for Gucci.
However, it doesn’t stop there: because of the country’s more stringent labor laws, the company must pay their employees a higher standard of living.
Assembling machines and other industrial equipment is crucial to achieving these higher standards, making them more expensive.
Countries such as Pakistan, Sri Lanka, and China offer lower minimum wages for workers, making them attractive options for companies looking to produce products at a lower price.
Manufacturing Overheads
While there are many benefits of manufacturing in Italy, price is not one of them. In fact, if you compare the cost of developing a factory in China and selling products at full wholesale value, you’ll find that you can manufacture and distribute a product for significantly less than its retail price.
The cost to make a shoe in China is typically one-half the cost of manufacturing it in Italy. Gucci uses its higher production costs as a key marketing and selling point.
Gucci Luxury
Designer shoes are luxuries that reflect the taste of fashionable people, but these branded products are often made at high prices that only well-off people can afford.
Most are decked out with pearls, bling-bling, perfumed fabrics, and crystals that can send out a subtle elegance and powerful classiness.
These shoes reflect a sense of class and sophistication, allowing you to make a statement wherever you go. While other shoes can’t even compare to designer brands, it’s almost impossible to replicate the exquisite quality of some top luxury brands.
Check out this video by MR FOAMER SIMPSON titled ‘WHY ARE GUCCI SNEAKERS SO EXPENSIVE?! (Should I Buy A Pair?)’. You’ll see exactly how much it costs to make a pair of Gucci sneakers, and how the brand is able to deliver such a premium product at such an excellent price.
How Much Does It Cost To Make a Shoe in China Now?
Although the costs of producing shoes has risen in China, the quality of Chinese footwear has also improved. Brands that care about product quality will also continue to set up in China.
The initial cost to make a shoe for a startup is $15,000 and $25,000, but a brand with high market potential may cost $80,000 or more.
There are a number of factors that contribute to manufacturing cost and price, including the design, raw material quality, bulk manufacturing, and others.
Though ‘made in China’ may be a pejorative, it doesn’t necessarily mean that the product will be of poor quality. The fact is it all boils down to manufacturing costs and the quality of materials used to make the product.
The manufacturing costs for $70 shoes are probably closer to $15-$20. China factory workers are paid pennies, and China companies purchase their materials in bulk — allowing retail brands to hold onto a profit margin of up to 80%.
Conclusion
The cost to make a shoe is fairly difficult to calculate because they vary with the quality of materials, the way they’re made, the number of units produced, and the location of production.
Naturally, you have to pay for testing, sourcing, design, production, shipping, distribution, and sales & marketing as well.
Creating a luxury item on a budget is possible if you’re willing to compromise. For example, Gucci could produce their sneakers in Italy, but the actual soles can be made by Chinese subcontractor manufacturers.
There is still value in that product for the brand because they purposely designed and engineered it, making the soles out of Italian leather.
What are your favorite shoe brands? Is there one brand that you think offers great value, and another one that doesn’t? Share with us in the comments below.
