Whew, seriously, that is just a few bucks of BOM cost! Low margins could help. Retailer’s margin expectations might be lower as may be the brand’s, but the only other way around that is to take cost out of the product.
Rubber outsole (might be open tool which would help) maybe about $2.50.
Looks like some molded parts on the upper there. Say $1 each, so about $2
No midsole, that saves some money
Probably a grenade construction insole? Say another approximate $2
Upper materials probably about $4
Assembly labor, maybe another $4
Total rough approximate BOM (I’m a few years out complete immersion of the shoe game, so this is pretty rough) $14.50
The factory might have a profit and development surcharge as well, but I might have over estimated a few components so it might be in the zone.
That leaves $10 to split between the retailer and the brand. Figure the retailer is going to take at least half, call it $6 and maybe the brand picks up $4. You have to do a lot of volume to get any real money. Lets say the brand has 15 - 20 employees which would be probably a little over $2mil in cost, and they have to pay for a US facility, not to mention customs costs, QA, shipping, warehousing, any marketing or promotions (those sales in the retailer’s Sunday paper insert cost the brand money) call it another $2mil just for fun. That means they would have to sell 600,000 pairs just to break even. Pretty impossible to do that on just one model, even with US big box distro, so probably at least 6 models in the line, which will also drive some of the costs up, but the only way to get the volume.
This is all back of the envelop fun math, but gives you a sense of why the brands that make smaller amounts of things with high quality design, materials and construction cost so much more.