Financial Modeling For your Shoe Company:
Before you send any orders to the shoe factory you need to build your financial models. Financial modeling and cost accounting are important calculations to show if you will make any money! This may sound complicated, but once you have a basic understanding, it’s easy. You will first need to calculate how much it will cost to buy your shoes and import them into your selling market. This is called landing.
FOB or Ex-works Purchase Terms for Shoes :
To build your shoe companies complete financial model, you are going to need to figure out your real product costs. When you negotiate your shoe purchase price, you need to set the purchase terms with the factory. Usually, your price will be quoted as FOB. The FOB price includes the cost to build, package, deliver the shoes by container truck to the container harbor and load the merchandise on the vessel. FOB means you will work with the international shipping lines to move your container and not with a local trucking company. Leave the local trucking price negotiations to the factory.
Another common shoe purchase term is “ex-works,” which means you or your freight forwarder are responsible for picking up the shoes from the factory. You may buy your shoes ex-works if you are loading a container with other products.
Landing Costs For Shoes:
Landing includes all the costs related to bringing your shoes from the factory to your warehouse. You need to add in the cost of ocean freight, inland trucking, harbor fees, insurance fees, import duties, document fees, taxes etc. It’s critical to understand these costs, as this will help you work backwards from your shoes’ selling price to your factory target price. A shoe which costs $15 FOB will cost closer to $17.46 to buy, ship and import into the USA. The additional inland freight inside your home country could be $.10 to $.50 per pair, depending on your distribution center’s proximity to the landing port.
If you are using an agent, you may be required to pay duty on the agent’s fees. It’s best to consult your home country’s import regulations. USA regulations require import duty to be paid on any molds or equipment used to make the shoes.
This is a basic calculation for the landed cost. Once you get started, your freight forwarder can help detail other small fees. Some of the costs of the components are under your control, and some are not.
Once you determine the cost to land your shoes, you will need to select your sales and distribution business model. You will find footwear sales and distribution models detailed in chapter 8 of How to Start Your Own Shoe Company, import duty for shoes is reviewed in chapter 5.
Learn more about making shoes:Do you want to learn how big brands make shoes? Now you can! How Shoes are Made will show you how modern shoes come to life! More than just a tour through a sneaker factory and more than your average shoe making book! From drawing shoe designs to sample development and footwear manufacturing, you will learn how it is all done. Written by veteran shoemaking pros, How Shoes are Made will give you a look inside the REAL world of shoe design, development, and mass production. 220 pages with over 400 color photos and drawings. 26 chapters explaining shoe design, footwear pattern making, sample development, footwear materials selection, upper stitching, outsole and tooling design, shoe lasts, shoe costing, quality inspections, starting you own shoe brand, and much more! A must read for young shoe designers, sneaker heads, or any footwear fanatic! See Preview Video On YouTube
Print Edition Now Available!
Table of Contents:The Design Process, Shoe Development, Shoe Patterns, Shoe Specifications, Outsole Tooling, Development Process, Pre-Production, Material Preparation, Stitching Operations, Rubber Pressing, EVA Forming, The Assembly Line, The Shoe Last, Footwear Costing, Importing Shoes, Shoe Logo Design, Leather for Shoes, Textiles for Shoes ,Synthetics for Shoes, Foam for Shoes, Know Your Footbeds, Material Suppliers, Shoe Designers Tools, Jobs in the Shoe Trade ,Quality Control, Starting a Shoe Company, Life at a Shoe Factory, Shoe Making Dictionary
If you want to learn more, check out our new books.
Print Editions and Instant Downloads Available Now!
E-Book edition 170 pages. PC and Mac compatible PDF file. Download Now!
E-Book edition 220 pages. PC and Mac compatible PDF file. Download Now!
Now enjoy the double download of two Sneaker Factory books.
Print Edition, 220 pages with over 400 color photos and drawings.
Print Edition, 250 Pages with over 400 color photos and drawings.
A must have for anyone serious about launching a new footwear company!
E-Book edition 170 pages. Profit margin and Size run calculators. Download Now!
Download Edition + Paper Pattern + Blue Prints and Spec sheets
Start-up Pack is all you need to get your own shoe business started.
Print Edition + Paper Pattern + Blue Prints and Spec sheets
A complete technical specification, drawings, blueprint, pattern and spec.
Computer cut shoe pattern for a classic jogger. Factory Blue Print included.
Entire pattern size run for the Arris classic trainer, Men’s US 7-13 (Euro 39-47)
24 inch tape specifically designed for measuring shoe lasts.
Ready to Print! Men's size 9 last. The .STL file can be scaled in X, Y and Z.
Great for checking leathers and synthetic materials. Features adjustable dial.