material costs and manufacturing costs?

Special Interest Areas footwear & softgoods
1

Hi again,

Could anyone tell me what kind of cost ratio there is in the retail price of footwear?

material costs : manufacuturing costs : product cost.

The model I’ve been told to use for an estimate by lecturers is Rondeau’s 1:3:9 rule, but that is based on experience in the chemical industry so I’d like to check if it is appropriate for cost estimating footwear.

So applying that ratio, for a £90 shoe manufacturing costs are £30 and material costs £10
is this a reasonable estimate?

Cheers
C

2

close.

depending on the shoe type (athletic, casual, etc.) and material (leather, synthetics, etc.) and price point, country or origin and destination, typical calculations are-

FOB cost of shoe x approx. 30% to get landed cost (incl freight, duties, etc.)

landed x 2 = wholesale price

wholesale price x 2-3 = retail price

material cost can be anywhere from 60 - 80% of the FOB cost.


therefore a shoe may that cost $20 FOB, is $26 landed, $52 wholesale, $130 at retail and the materials cost could be $15.

R

3

awesome thanks again Richard!

Cheers
C

4

so just think how that works on the Startbury’s >>> they sell them wholesale, but still, back track out of $15 and figure it out.

5

not too mention what happens if you add in frills… Vibram, Boa Lacing, Gore- Tex.