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- Mar 20, 2013
I have seen employees at shoe chains like footlocker , Champs and Specialy DTLR here in Atlanta do A LOt of shady stuff. No one should ever have to pay $250 for 7y Jordan 11
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The overall Jist of you post is true but remember that in this case we are talking about what has essentially become a lifestyle brand for the most part. People who shop Nike/JB, shop Nike/JB. Like Apple customers, Audi drivers and etc... Nike would not miss a beat by cutting all the smaller accounts because like you said most of them probably owe Nike anyway for the non retro items that they can't move. And while Niketown and factory store outlets would cost more in overhead to operate, Nike wouldn't have to add a ton of stores due to the fact that with smartphone/debit card usage people wouldn't have to adapt as much to online shopping for shoes, as well as the fact that unlike a start up company Nike wouldn't have to start with store #1 and expand outward. People keep saying that the non retros are a hard sell when honestly 8 out 10 Nike/JB products you see are non-retro, bottom of the price tier products and like I said before current outlet pricing is well above what the true outlet prices use to be, so Nike/JB is still making a ton more money than we think of those items that go to outlet or hit clearance.Of course Nike can "cut out the middleman" to increase profits, but it's not as simple as a lot of you make it sound.
First off, while Nike doesn't need these stores to help them move hot items, they do need them to help move the junk. Hell, Nike uses them to move the junk. As others have stated, you have to accept a lot of other crap to get the privilege of selling hot releases. And, this is key to Nike for a number of reasons.
First, Nike doesn't have to worry about selling their less desired product on their own. They hold the hot items for ransom and essentially extort the shops by forcing them to buy all this other stuff - for the NYC cats, this is the same model Dolan used with his networks that led to the MSG/Time Warner lock out a few years ago. Anyway, if you take away the retros from these stores and many of them fold, Nike now has trouble moving their Tailwinds and stuff, so that eats into the profits they gain by bringing a greater percentage of the hot item commerce in house. Rule #1 - there are always unintended consequences to actions!
Second, tons of these shops are likely in debt to Nike in the first place. If you cut off their best sources of revenue, you hurt your chances of getting paid. That's part of the reason Nike is somewhat two-faced about the mark-up issue. They act like they hate it, but they set up their vendor model in a way that often makes it borderline necessary for the shops. Essentially, a good chunk of that money goes back into Nike's pocket too - paying down bills, and keeping the store going to sling more product and begrudgingly accept more shipments of stuff that won't sell. A pimp can't beat his ladies to the point that they can't work...
Third, somebody in the thread mentioned creating more Nike Towns. Well, physical stores are expenses. You have to pay for space. You have to pay employees. You have to pay liability insurance. When Nike sends product out to others, these are all costs that the third party retailers have to bear. Certainly the overhead to expanding their digital storefront is lower, but it's still more employees to process orders, more warehouses, and all that. Changing the current model requires bringing in costs that are currently passed off to others. ...Certainly, this does not equate to the increased profit per item from selling more through their site and B/M locations, but it's a factor that hasn't been discussed.
TLDR; relationships with shops are not about moving AJ Retros, they are about a network that allows Nike to still profit from all the junk too. The proposed move potentially threatens that.
BTW, nice info 160 - but it's quite ironic to hear you so adamantly lambaste those marking up newer releases. Sold those Yeezy 2s for your $2500 asking price yet?
For me YES, for everyone else I have no idea. Nine times out ten he charges retail, with the exception of a FEW different products.does he charge retail for his hot products?
The overall Jist of you post is true but remember that in this case we are talking about what has essentially become a lifestyle brand for the most part. People who shop Nike/JB, shop Nike/JB. Like Apple customers, Audi drivers and etc... Nike would not miss a beat by cutting all the smaller accounts because like you said most of them probably owe Nike anyway for the non retro items that they can't move. And while Niketown and factory store outlets would cost more in overhead to operate, Nike wouldn't have to add a ton of stores due to the fact that with smartphone/debit card usage people wouldn't have to adapt as much to online shopping for shoes, as well as the fact that unlike a start up company Nike wouldn't have to start with store #1 and expand outward. People keep saying that the non retros are a hard sell when honestly 8 out 10 Nike/JB products you see are non-retro, bottom of the price tier products and like I said before current outlet pricing is well above what the true outlet prices use to be, so Nike/JB is still making a ton more money than we think of those items that go to outlet or hit clearance.
Also as to the effect that new stores would have on profitability, just pay attention to Wal Mart and chain dollar stores. You have to create extensive retail networks to increase profitability. These stores usually become profitable in a very short period of time and with the case of Nike the you would have the wholesaler/distributor/retailer all in one, therefor maximizing profit. Also, I really think that Nike noticed that with the recent upswing of phone orders at outlets that alot of these accounts are not as beneficial as they use to be. Because as you said alot of these stores are in debt to Nike but are still receiving new orders while stock is sitting, while the same stock is moving in outlet because of modest markdown or internet buzz. Also, just think about the fact that the stock that is sitting in these stores can't be stock located by Nike because the store has it in their system. Nike is loosing big time on most of these small accounts or better yet loosing out.
And your arguement about more manpower and space. Doubling it would be justified if current profit reflected, Nike being able to clear 100% of current retail sticker versus the 55-65% that they do by selling to account holders.
Also, I think a NIKE/COLE HAAN/JB stoe would be pretty hard to compete with. And look what they could do with Cole Haan in terms of casual clothes, WOW.
Of course Nike can "cut out the middleman" to increase profits, but it's not as simple as a lot of you make it sound.
First off, while Nike doesn't need these stores to help them move hot items, they do need them to help move the junk. Hell, Nike uses them to move the junk. As others have stated, you have to accept a lot of other crap to get the privilege of selling hot releases. And, this is key to Nike for a number of reasons.
First, Nike doesn't have to worry about selling their less desired product on their own. They hold the hot items for ransom and essentially extort the shops by forcing them to buy all this other stuff - for the NYC cats, this is the same model Dolan used with his networks that led to the MSG/Time Warner lock out a few years ago. Anyway, if you take away the retros from these stores and many of them fold, Nike now has trouble moving their Tailwinds and stuff, so that eats into the profits they gain by bringing a greater percentage of the hot item commerce in house. Rule #1 - there are always unintended consequences to actions!
Second, tons of these shops are likely in debt to Nike in the first place. If you cut off their best sources of revenue, you hurt your chances of getting paid. That's part of the reason Nike is somewhat two-faced about the mark-up issue. They act like they hate it, but they set up their vendor model in a way that often makes it borderline necessary for the shops. Essentially, a good chunk of that money goes back into Nike's pocket too - paying down bills, and keeping the store going to sling more product and begrudgingly accept more shipments of stuff that won't sell. A pimp can't beat his ladies to the point that they can't work...
Third, somebody in the thread mentioned creating more Nike Towns. Well, physical stores are expenses. You have to pay for space. You have to pay employees. You have to pay liability insurance. When Nike sends product out to others, these are all costs that the third party retailers have to bear. Certainly the overhead to expanding their digital storefront is lower, but it's still more employees to process orders, more warehouses, and all that. Changing the current model requires bringing in costs that are currently passed off to others. ...Certainly, this does not equate to the increased profit per item from selling more through their site and B/M locations, but it's a factor that hasn't been discussed.
TLDR; relationships with shops are not about moving AJ Retros, they are about a network that allows Nike to still profit from all the junk too. The proposed move potentially threatens that.
BTW, nice info 160 - but it's quite ironic to hear you so adamantly lambaste those marking up newer releases. Sold those Yeezy 2s for your $2500 asking price yet?
Of course Nike can "cut out the middleman" to increase profits, but it's not as simple as a lot of you make it sound.
First off, while Nike doesn't need these stores to help them move hot items, they do need them to help move the junk. Hell, Nike uses them to move the junk. As others have stated, you have to accept a lot of other crap to get the privilege of selling hot releases. And, this is key to Nike for a number of reasons.
First, Nike doesn't have to worry about selling their less desired product on their own. They hold the hot items for ransom and essentially extort the shops by forcing them to buy all this other stuff - for the NYC cats, this is the same model Dolan used with his networks that led to the MSG/Time Warner lock out a few years ago. Anyway, if you take away the retros from these stores and many of them fold, Nike now has trouble moving their Tailwinds and stuff, so that eats into the profits they gain by bringing a greater percentage of the hot item commerce in house. Rule #1 - there are always unintended consequences to actions!
Second, tons of these shops are likely in debt to Nike in the first place. If you cut off their best sources of revenue, you hurt your chances of getting paid. That's part of the reason Nike is somewhat two-faced about the mark-up issue. They act like they hate it, but they set up their vendor model in a way that often makes it borderline necessary for the shops. Essentially, a good chunk of that money goes back into Nike's pocket too - paying down bills, and keeping the store going to sling more product and begrudgingly accept more shipments of stuff that won't sell. A pimp can't beat his ladies to the point that they can't work...
Third, somebody in the thread mentioned creating more Nike Towns. Well, physical stores are expenses. You have to pay for space. You have to pay employees. You have to pay liability insurance. When Nike sends product out to others, these are all costs that the third party retailers have to bear. Certainly the overhead to expanding their digital storefront is lower, but it's still more employees to process orders, more warehouses, and all that. Changing the current model requires bringing in costs that are currently passed off to others. ...Certainly, this does not equate to the increased profit per item from selling more through their site and B/M locations, but it's a factor that hasn't been discussed.
TLDR; relationships with shops are not about moving AJ Retros, they are about a network that allows Nike to still profit from all the junk too. The proposed move potentially threatens that.
BTW, nice info 160 - but it's quite ironic to hear you so adamantly lambaste those marking up newer releases. Sold those Yeezy 2s for your $2500 asking price yet?
Mister sports in the Bronx was charging $272 for Bred 11's on Release day
Are you in Houston?our local City Gear should be on the list and I'm down south. they only sell their stock to family. and they're extremely rude when you ask about releases.
Are you in Houston?our local City Gear should be on the list and I'm down south. they only sell their stock to family. and they're extremely rude when you ask about releases.
100% true especially here in Houston, City Gear is MADDDD shady!!! Their is a local reseller who I have watched for 8-9 months now. After inspecting his pics on Craigslist I noticed in almost all of them they had a sticker sku on the box that is only exclusive to City Gear for inventory tracking. All you have to do is go to craigslist and this guy has at least 2 size runs of EVERY release thats hot.... including foams etc. And his price is at least 100.00 over sticker even after tax!!! He even had 2 size runs of the Corks. When u type in his phone number over 30-40 listings pop up under it... SHUT THEM DOWN!!!!our local City Gear should be on the list and I'm down south. they only sell their stock to family. and they're extremely rude when you ask about releases.
nah , Mobile , Alabama.Are you in Houston?
nah , Mobile , Alabama.
Ok, just had this conversation with my boy who owns 2 stores with accounts. From what he told me, the stores in the Cherry Hill/Philly area are not losing their accounts because of them being shady. This had more to do with stores not updating their retail space to Nike's satisfaction or at all in some cases. The way Nike sees is it that it is a privilege for a retail location, especially Mom & Pop stores, to have a Nike account, let alone an urban account that may get you the hottest releases of the year. My boy situation was that he has a store in North NJ. It was a per existing shop with small account. During this same time, he had another shop not too far away they didn't really have a Nike account and a few sister stores in the area. They decided to do some renovating and actually ended up closing one of the stores that had the most foot traffic. Nike rep stopped in a few months ago and more or less insisted he make renovations or he may lose his account. So he shuttered the door to one store, and decided to renovate his premium space to start a new store. Nike came back and inspected and were very impressed with the newly renovated location. Because of this he said they may be giving him a quick strike account, upgraded from second tier urban I believe. BUT the trade off is that the other location that he refused to renovate can no longer hold the Nike account or even sell Nike products. This has everything to do with Nike's desire to have an "upgraded" customer experience with its higher end, money making products.
Good info, thanks.
Thank you sir. All I have been trying to say is that although these stores could possibly have been practicing in shady deals, that was not the reason for them losing their Nike accounts. Now if only the shops that DO practice in shady deals start to get investigated....but that's a completely different animal...That post by 1IX8VI is right and exact. When Nike comes to your shop they are coming to do an inspection.
They want to see how you are presenting THEIR product. They want to see your overall store appearance as well.
Nike product has to be displayed at the very front of the store, etc etc.
And you HAVE to do what they tell you, or expect a series of emails similar to the ones being issued now.
[COLOR=#red]That post by 1IX8VI is right and exact. When Nike comes to your shop they are coming to do an inspection.
They want to see how you are presenting THEIR product compared to the competition. They want to see your overall store appearance as well.
Nike product has to be displayed at the very front of the store, etc etc.
And you HAVE to do what they tell you, or expect a series of emails similar to the ones being issued now.
Think about it. As your supplier I know your selling my products for twice the MSRP.
The LEAST the store can do is use some of that money to upgrade their store.[/COLOR]
Thank you sir. All I have been trying to say is that although these stores could possibly have been practicing in shady deals, that was not the reason for them losing their Nike accounts. Now if only the shops that DO practice in shady deals start to get investigated....but that's a completely different animal...
You sure? I would beg to differ but then you might have some insight that i don't have into policy versus practice. I think any brand is concerned about presentation but I know for a fact front of the store is not one.That post by 1IX8VI is right and exact. When Nike comes to your shop they are coming to do an inspection.
They want to see how you are presenting THEIR product compared to the competition. They want to see your overall store appearance as well.
Nike product has to be displayed at the very front of the store, etc etc.
And you HAVE to do what they tell you, or expect a series of emails similar to the ones being issued now.
Think about it. As your supplier I know your selling my products for twice the MSRP.
The LEAST the store can do is use some of that money to upgrade their store.
[COLOR=#red]That post by 1IX8VI is right and exact. When Nike comes to your shop they are coming to do an inspection.
They want to see how you are presenting THEIR product compared to the competition. They want to see your overall store appearance as well.
Nike product has to be displayed at the very front of the store, etc etc.
And you HAVE to do what they tell you, or expect a series of emails similar to the ones being issued now.
Think about it. As your supplier I know your selling my products for twice the MSRP.
The LEAST the store can do is use some of that money to upgrade their store.[/COLOR]
West Mobile. the City Gear I'm talking about is in the mall.I moved from Mobile in '11. I actually lived there twice. I wasn't collecting Jordan's when I left so I don't remember a City Gear, but we have them around Houston. Where in Mobile are you?
West Mobile. the City Gear I'm talking about is in the mall.