Friday, May 27, 2011

Some people pay a lot to look cool....

So today I was at the local Academy Sports and Outdoors retailer, you know... the one that has the right stuff at the right price?
I was here a few days ago to visit the fishing department and the storefront looked normal, upon my return today it looked like a bomb of Dallas Mavericks Championship gear exploded in the entrance. I could not believe how quickly companies had produced these apparel items. Then I realized that these were probably made BEFORE the Dallas Mavericks even won the series which would lead me to believe that sitting somewhere in a warehouse is a huge lot of Oklahoma City Thunder apparel. What is going to happen to these shirts and hats? Probably they will be donated or sold dirt cheap to the poor in foreign countries. I remember when I was in youth group and we used to go down to Mexico every year to build houses, (Back when people were not scared of drug lords and machine guns), I would always see people wearing lots of sports clothing for teams in the USA. I now believe that most of this is donated. Maybe all those children in Juarez really do love the Denver Broncos but my guess goes with the corporate donation.
I know when civilians donate items they get to deduct so much from their taxes... well I would bet that corporations that donate shirts and hats for teams that didn't perform get to donate those as well.
At academy a basic Mavericks t-shirt will run you about 20 dollars.... lets say that it cost 6 dollars to manufacture and ship that shirt in bulk.
The company has to pay for an OKC Thunder shirt to be made too so that bumps up production costs to 12 dollars a shirt.
That 12 dollar shirt now gets sold for 20 which puts 8 dollars in profit into the store and/or manufacturer.
But now the producer has a bunch of OKC Thunder shirts that are wrong... what to do?
I would guess that they donate these shirts, write them off at a cost of production value and deduct that from their taxes.
Lets say the deduction rate is a dollar deducted for a dollar donated.
Now they have earned 14 dollars per shirt based on the 6 dollar production cost making it worthwhile to print shirts for both outcomes because no matter who wins you will make the money of the lost shirts back.

Lesson learned? I need to get into the sports apparel business.

1 comment:

  1. They do donate them to poor people in 3rd world countries, but I'm pretty sure they require them to be overseas... I read about it somewhere, let me see if I can find the article. Found it! http://www.mentalfloss.com/blogs/archives/36135
    Tah Dah!

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