Friday, January 27, 2017

Sneakers, Revisited - Price Fixing?

Why do sneakers cost so much and why do the prices seem to be the same everywhere?

A reader asks what is the best way to buy sneakers - at a store, or online?  And how do you get the best price possible?  It is a tough question:
What in your view is the best way to buy sneakers : online or from the store
The online ones have
1) Greater discounts
2) Greater variety
But the cons of online shops are
1) You cannot judge if it feels good on your feet
2) You cannot trust that you are getting the original one (as many private sellers are buying it)
3) Returning them could be a pain (i.e. will the online shop take it back, do I have to pay the return postage fees, also after waiting for a week to get a sneaker and then returning if it is not good, maybe I could try another shoes..but this process is time consuming till I find the perfect fit
The reader pretty much summed it up.   My solution was to find a pair of sneakers I liked at a store, and then when they wore out, buy replacements online.  This requires you buy from a manufacturer who doesn't change styles every year.

Sneakers, or "trainers" as they call them in the UK are staggeringly expensive considering how much they cost to be made in the factory in Korea, China, or the like.  They can cost as little as $10 a pair to make and sell for over $100 in America.   Most are made with expanded polyurethane foam soles, which compress down to nothing if they are worn regularly for a year or so.  The only exception to this rule is the Nike Air shoes, which have an insert that, if not punctured, will retain its shock absorption capabilities for far longer.  Once sneakers lose their shock absorption capability, they should be replaced, even if they don't look worn.

Finding a pair of sneakers that fit and work well for you is problematic, as you have to try them on and wear them to see how they work.  Once you find a pair that fits well and wears well, well, by the time you wear them out, they no longer make them.   So you have to start over with a new design.

We have lucked out with the Merrell Moab line of shoes, which they have made for many years.  We have bought three pairs each.  The first pair we bought at a shoe store back in 2009 for about $125 a pair.  The second and third pairs we bought online, as we knew the model and size we wanted.  We bought one pair in 2012.  We bought another pair in 2014.  I guess it is time to get a new pair, as these are now three years old and worn constantly, they start to get ratty (I keep my previous pair for mowing the lawn, painting and working on cars).  A nice thing about Amazon, you can go back and see what you bought and what size and model.   A good feature of online retailing!
What was odd, in the past, was that the price online was  $99.99 almost everywhere we looked.  I found one pair for $69.99 for Mark, but that was a fluke from a company eliminating old stock.  I saw many online for $99.99, or $99.97 or even $98.99, but all right withing a dollar or so of each other.  I see now that the price has dropped to below $80 for most pairs, but again, when you search online, there is an amazing uniformity of price, now at this new lower level (probably due to currency fluctuations).

While this is not evidence of price fixing per se, it illustrates how prices can remain largely inflexible.   The manufacturer sells at wholesale, and each retailer has to pay that price, unless they get a better price for buying in volume.   The manufacturer cannot sell too cheaply to one retailer, though, or the other retailers get pissed off.   Since the overhead of most businesses is about the same, the mark-up remains fairly consistent, and thus the retail prices fall into a bell curve - there are no screaming bargain prices out there, just reasonable deals.

So far, they seem to want to continue to make these sneakers, so maybe I will buy a fourth set of pairs of them.  Since we know the make, model, and color, as well as size, ordering is as easy as a click of a mouse.

If I did not know what kind of sneaker I wanted, though, it would be hard to figure out what fit me, met my needs, and wore well.   For that, you need to go to a "brick and mortar" store, and they are becoming harder and harder to come by.   Buying shoes online, even with generous return policies, can be time consuming and tricky.

All I can say is if you find a pair you like from a company that doesn't change styles every four hours (and you know which company I am talking about) then stick with them.   I hope the Merrell people keep making this shoe, it is comfortable and long-lasting, and I hate to have to find a new favorite.

I should mention that I did buy a pair of similar Keene's.  They are OK, but tend to squeak for some reason.  I also found a similar pair of LL Bean branded shoes (at the factory outlet) for cheap, but they don't seem to have the same level of cushioning.

Cheap sneakers, as I have noted before, are no bargain.  Some of the "sneakers" they sell in the bargain aisle in Wal-Mart provide very little cushioning and can be painful to wear.  Or at least they were when I tried a pair of $12 sneakers many years ago (I bought another pair recently, for bicycling, as I needed a smooth pair that could be extracted from the toe clips easily - Wal-Mart sneakers have improved, but still don't have the cushioning of more expensive shoes).

Of course, my method of buying sneakers doesn't work for most people, as they want the latest fad and style shoe, not something reliable and inexpensive.   Last year it was bright orange and tennis-ball yellow sneakers, which look ridiculous when worn indoors.  Hopefully the riot of color at the designer sneaker stores has toned down since then.   If you want the "latest styles" you are going to pay top dollar, and for what?   So people who you don't know will be impressed?   How often do you notice what kind of shoes other people are wearing?   I thought so.

UPDATE:  Buying direct from the manufacturer seems to be the new model.  Both Merrill and Bissell, for example, charge the same prices on their own websites as can be found on eBay or Amazon.  And if you become a "frequent flyer" the prices may actually be lower.  Jeff Bezos might be losing sleep over this.