Do you think Reebok should sell $1 shoes all around the world?

Hi Mashnn, companies like Reebok will not sell shoes at a loss, even if they want to be generous. They will still make a profit. The price seems low, because we are thinking about the cost in our country. If we think from the perspective of a worker in India countryside, a dollar means a lot of money. Reebok can easily make million of shoes in the countryside, making use of the cheap labor, cheap land, and cheap material. i think by the time they export to our country, the cost of a pair of shoes will increase many times. Our government will definitely tax very high too.

Hope they can do it even if they decide to double the amount. It will be a good thing for this holiday.

Excellent thinking, Scheng1! If they did that, people would have affordable shoes and jobs, too.

Hi Dragon, obviously the company cannot make money if they make the shoes in developed countries and shipped the shoes to third world countries. However, a dollar is a lot of money iin many places. If they can locate the factories in the countryside of India, and sell the shoes in the locality, then they can still make a good profit. The labor is cheap. Land is practically free, and they do not have to pay for international freight charge. I think the $1 shoes will cost ten times more if imported to developed countries. Even then, paying $10 for a pair of shoes is still cheaper than many branded shoes.

Hi Hotsummer, Reebok definitely does not sell shoes cheaply for charity purpose. The newspaper did mention about tapping into the huge market in the countryside of India. I think even if the profit is 20 cents per pair of shoes, and due to the population size, the company can still make a few million dollars per year. If you are thinking of the purchasing value of a dollar in your country, then you are analyzing it wrongly. A dollar to us is not a lot of money, but it is a lot to the poor people in India. Reebok definitely has to set up factories in India, source for material locally, and make use of cheap labor to make the shoes. They can cut down on manufacturing expenses, and transportation expenses. Selling at a dollar in India is profitable if you see from this angle. Over there, they sell a sachet of shampoo for 2 cents. It is enough for two washes. The shampoo company is still making more than enough to cover the cost of manufacturing.

Hi Sonaimajumdar, since you are used to the quality of the normal Reebok shoes, you will definitely not like the cheap ones. I think the quality of the $1 shoes will be very inferior to the costlier ones. These are definitely designed specially for the poor ones. I think it is good to have different shoes at different price so that everyone can afford it

Hi Tiffnkeat, I think the quality is enough for use in the countryside of India, but not good enough for marathon runners! Reebok definitely can still make money by selling cheap shoes. A few years back, I bought some shoes in China for 10 RMB, and those shoes are rather comfortable. If China can make shoes at such low cost, and the manufacturers still make a profit, then I do not see why Reebok cannot do so. The raw material obtained at source is always very cheap, and the labor cost is very low too.

Hi Joylynsebog, I think the price is just for Indians in the countryside of India only. If they want to sell shoes at such low costs, the government will definitely impose a very high tax, and we cannot pay such a low price. Reebok definitely has to set up factories in the locality, and source material and labor there. Once they start to export to other countries, the price will be very low. Maybe the design and material will be very different too. Those shoes selling at just a dollar definitely will be of a lower quality.

Hi Bunnybon, I do not mind even if Reebok sells the shoes at ten dollars per pair, or that the quality is inferior than normal branded shoes. I think they can cut cost by 50% and still not making a loss. too much profits go to the middleman. if they can cut down on the commission to others, they can lower the price. After all, shoes are made in countries where people earn just a couple of hundred dollars per month. Raw material comes from third world countries too.

Hi Meticulo, Reebok is definitely not doing it for the sake of charity work. They see that the population in India, especially in the countryside, is massive. After all, India has one of the largest population in the world. Even if they sell at the cost of $1 per pair, they could have made a few million dollars just based on the volume of sales. After all, a dollar is worth a lot in the countryside of India. The poor people would have to save up for weeks just to get a pair of shoes. Reebok has to make the shoes in India, in order to make a profit. Labor is very cheap there, and the raw material is very cheap also. If they based the plant there, they can build a very large factory on very cheap land. The cost of production is low, and the quality is definitely inferior to the ones made for developed countries. I think by the time they bring the shoes to Philippines, the cost will be more than ten dollars.

Hi Jaiho, I do not think a commercial oompany will think about helping people in this way. Reebok will still make millions even if they sell shoes at $1. We are thinking about the purchasing power of $1 in our country, which is not a lot of money. But to Indians in rural area, $1 is a lot of money. They probably have to save for weeks to get one US dollar to buy a pair of shoes. Reebok has to make the shoes in the rural part of India if it wants to sell to them cheap. The cost of manufacturing shoes is very low. it can source for raw material locally, and the labor cost is very low. Land cost is almost non-existence, given the size of India. I think Reebok has to sell the shoes at ten or twenty times if it wants to import to other countries.

Hi Ashudeep, I think the target of the big malls is the poor people. Those people in the city already have access to all the shopping malls and branded goods. They are not likely to pick up inferior quality even at such cheap price. I think Reebok should sell to all the poor people in the world, not just to poor people in India.

Hi Luckygrey, the newspaper quoted some villagers as saying that they never heard of Reebok before. I think Reebok is not as famous as you think. It probably is the brand name for certain countries, but not all. Since Reebok has already made such announcement, it must have planned for a long time. The shoes are probably made by cheap labor in third world countries for people in third world countries.

Hi WakeupKitty, actually there is no reason for branded goods to be so expensive, since they are making it in low cost countries. I think if they just mark up according to the cost of manufacturing the products, everything will cost half or even a quarter as much. Shoes are great if they are well made. The problem with most shoes is in the ventilation. Most shoes are badly designed, and the feet cannot breathe.