On the last Nike earnings call, they were very proud to tell everyone that the DTC (Direct To Consumer) part of the business is growing much more rapidly than any other part. So it doesn’t only depend on Footlocker [anymore].
I’m not sure how tariffs work on retail products such as these. Nike produces 100,000 shoes overseas for $15 each, and then ships them all to the USA. They sell 70,000 of them to “Footlocker” (retail stores around the country) for $60 with MSRP at $89.99. They sell 20,000 DTC for $80 each on average (because they offer coupons and deals and free shipping and loyalty programs and etc). And then as the year passes, they have 10,000 leftover, out of that 2,000 are given away for various promos and sponsorships. The remaining 8,000 are shipped to discounters (“TJ Maxx” and the like) for $20 each.
What is the tariff on those 100,000 shoes? Is it 100,000 x $15 x tariff% or something else?