A $100 pair of running shoes costs $100 because the company has to pay for advertising and make a profit, the actual shoe costs much less than $100 in manufacturing costs. Plus there is a retailer markup. I would venture to say that when it is all said and done at least 50% of the money you pay is going to several companies for profit.
It's true that a $20 shoe will be of a lower quality than a $100 shoe but it isn't all lost because of the quality of the product. The company doesn't have the giant advertising bill, the employee base, and I would assume not as many middle men. It isn't all in the cost of the materials and labor. Nike has to pay professional athletes to wear their shoes, but brand X doesn't. So to be competitive they have a lower profit per shoe to try to gain a large number of value shoppers to gain as much profit as they can.
It's just different business strategies born from the different companies operating environments.
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A $100 pair of running shoes costs $100 because the company has to pay for advertising and make a profit, the actual shoe costs much less than $100 in manufacturing costs. Plus there is a retailer markup. I would venture to say that when it is all said and done at least 50% of the money you pay is going to several companies for profit. It's true that a $20 shoe will be of a lower quality than a $100 shoe but it isn't all lost because of the quality of the product. The company doesn't have the giant advertising bill, the employee base, and I would assume not as many middle men. It isn't all in the cost of the materials and labor. Nike has to pay professional athletes to wear their shoes, but brand X doesn't. So to be competitive they have a lower profit per shoe to try to gain a large number of value shoppers to gain as much profit as they can. It's just different business strategies born from the different companies operating environments.