Why are Air Jordans So Expensive | The High Cost of Nike Air Jordans

TLDR Nike’s business strategy behind Air Jordans involves creating exclusivity and scarcity through limited releases and auctions, driving up their value and desirability, leading to immense success and a lucrative resale market.

Key insights

💼The business strategy of Nike behind Air Jordans involves creating a sense of exclusivity and scarcity, as seen through limited releases and auctions of iconic shoes worn by Michael Jordan, driving up their value and desirability.

💸Air Jordan 1 exceeded Nike’s expectations, generating $126 million in sales in its first year and paving the way for the brand’s immense success, with Air Jordans generating $5 billion in 2022.

🎨The unique and thoughtful design of Air Jordan 1, incorporating the colors of Michael Jordan’s team, the Chicago Bulls, sets them apart from other shoes and adds to their popularity.

💰The resale market and sneaker culture surrounding Air Jordans has become a lucrative business, with people buying and selling sneakers for profit.

🏀Air Jordans became a big brand due to a clever marketing strategy that took advantage of the shoes being banned in the NBA, with Nike launching a commercial highlighting that although they were banned in games, people could still wear them outside of the game.

📈”The price of tea-leaves will increase because the supply is limited, but if some of them stop taking tea, then the price will come down a little!”

🔄Sneakerheads contribute to the increase in prices by buying the shoes before they hit the market and reselling them at even higher prices, creating more artificial scarcity.

Highlights

👟00:00 Air Jordans are expensive due to limited availability, high demand, and special significance, and Nike hired Michael Jordan in 1984 for brand promotions. 

👟02:09 Nike Air Jordans became expensive due to a lucrative deal with Michael Jordan and the unexpected success of the Air Jordan 1, leading to the brand’s massive popularity and high demand.

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💸04:48 Air Jordans are expensive because of the high quality, innovative design, and historical significance.

👟06:09 Nike Air Jordans are expensive due to continuous innovation, combining fashion and sports utility, and the resale market and sneaker culture.

👟07:45 Nike Air Jordans are expensive due to their brand value, iconic design, marketing strategy, high demand, limited supply, and price elasticity control. 

👟10:17 Nike Air Jordans are expensive due to high demand, no discounts, and artificial scarcity created by Nike to maintain exclusivity and status. 

👟12:00 Nike Air Jordans are expensive due to intentional scarcity and high demand, leading to inflated prices in the resale market.