Costs of making an NHL jersey

[sjosty26]

So, in one of my accounting classes we were just going over all the aspects that go into the cost of a product.

It's pretty much simplified to Direct Materials, Direct Labor, and Manufacturing Overhead.

Which had me wondering (and to no avail of a google search), what do you think are the costs that Reebok endures to produce one NHL jersey (premier or authentic).

It's interesting, especially with the war Canada faces with the influx of Chinese counterfeit jerseys due to the high prices found on NHL.com. The chinese jerseys sell for about $37USD, so they must make some money, then you have to add in the cost of official licensing which means NHL jerseys selling for $175-375, the profit margins must be huge.

What do you guys think it costs to produce a official premier-authentic jersey?

DM- double knit polyester, team crests, name & numbers, dry fit technology, reebok logos etc- $35?
DL- Man power, hourly wage, operate the machine/handcraft- $12?
MO-Official licensing, machine wear, anything not in previous two categories - $15?
$40-70?

It's not surprising if the profit margin is a cash cow, tickets sold generally brings in only so much revenue year to year so merchandise really helps boost the league's NOI.

 

[SSMHoundsFan]

So, in one of my accounting classes we were just going over all the aspects that go into the cost of a product.

It's pretty much simplified to Direct Materials, Direct Labor, and Manufacturing Overhead.

Which had me wondering (and to no avail of a google search), what do you think are the costs that Reebok endures to produce one NHL jersey (premier or authentic).

It's interesting, especially with the war Canada faces with the influx of Chinese counterfeit jerseys due to the high prices found on NHL.com. The chinese jerseys sell for about $37USD, so they must make some money, then you have to add in the cost of official licensing which means NHL jerseys selling for $175-375, the profit margins must be huge.

What do you guys think it costs to produce a official premier-authentic jersey?

DM- double knit polyester, team crests, name & numbers, dry fit technology, reebok logos etc- $35?
DL- Man power, hourly wage, operate the machine/handcraft- $12?
MO-Official licensing, machine wear, anything not in previous two categories - $15?
$40-70?

It's not surprising if the profit margin is a cash cow, tickets sold generally brings in only so much revenue year to year so merchandise really helps boost the league's NOI.

Jerseys are made in China or some other third world country like Thailand or Bangladesh; poor labour conditions, poor wages..probably costs $10-20 to make a Jersey AT MOST, and most of that is materials (Labour is $1 at most, Licensing is probably $0)...even then I'm probably overestimating the cost of materials

 

[tony d]

Interesting stuff there but yeah there has to be a lot of great profit made when a team sells a jersey.

 

[LadyStanley]

Licensing... for official merchandise...

May be 10% of retail cost.

All depends on the royalty agreement with manufacturer (and/or retailer).

 

[TOGuy14]

Relevant?

http://www.ctvnews.ca/w5/fake-jersey-business-alive-and-kicking-despite-chinese-crackdown-1.2221100

This guy is making knock off jerseys in China.

He says he can make and deliver 5,000 hockey jerseys a month. His price? $15.81 per sweater for replica NHL jerseys with embroidered team crests, player names and numbers and shoulder patches.

I'd say that's probably close to the NHL's number to manufacture as well. They may pay slightly more for higher quality materials but would get a bigger discount for buying in larger scale which would probably even it out.

Use this as our baseline unless someone has better math to use?

Looks like I was right:

http://www.tsn.ca/faking-it-the-real-cost-of-fanwear-1.201521

TSN interviewed current and former executives with Reebok and other sports apparel companies and came up with these estimates:

Reebok pays about $15 to produce the jersey - including material, labour wages and other related expenses. Reebok's parent company Adidas says it works with more than 1,200 independent factories in 65 countries, including Indonesia, China and Vietnam.

Production costs for jerseys made in Canada or the United States can be higher than those for overseas factories, garment industry sources say.

When the NHL's fee is factored in, along with marketing and ad costs, each game NHL jersey costs the company about $75.

Reebok then sells those jerseys to wholesalers and retailers for about $150.

Retailers tend to double that price to give themselves a profit margin after expenses. That leaves the customer paying about $330.

So strictly the MANUFACTURING cost of a jersey is around $15. The rest is other hands taking cuts around the table before it hits the market.

 

[Confucius]

It probably costs less than a dollar for the material. The Labour cost would be less than that. In all probability an employee in a sweatshop may earn 1dollar an hr. I'm sure he accounts for more than one jersey made in that hour. There is some shipping costs which probably is more than Labour and material combined but how much hmm maybe 5 dollars for each jersey. You have to add in startup costs, such as machines, building rent, electricity.

All in all I'd say 95% of the cost of an NHL jersey is for licensing both for the Reebok and NHL name and profit for both the. manufacturer and retailer.

I also believe there is no difference in quality of materials. Polyester is polyester thread is thread. Why would anyone try to save pennies there. However there are knockoffs and then there are knockoffs. For example I'm sure there are some people who try to make their own jersey.

 

[Bondurant]

The sports jersey is an item of outrageous cost. My assumption has always been that the logo is the primary drive as well as the market allows such a cost. If the black market jersey sales cut enough into the profits, the cost would likely come down. Then again, consumers could foot the bill for black market losses.

I used to shy away from black market apparel out of fears the quality of product would reflect the price. Then I purchased an AC Milan jersey for, I think, $15 in Toronto and it was just as good as the shirts on the rack for $75.

I have yet to buy a black market hockey jersey so I cannot attest to how they compare.

I would be interested to know the actual cost of a jersey, though.

 

[BattleBorn]

The sports jersey is an item of outrageous cost. My assumption has always been that the logo is the primary drive as well as the market allows such a cost. If the black market jersey sales cut enough into the profits, the cost would likely come down. Then again, consumers could foot the bill for black market losses.

I used to shy away from black market apparel out of fears the quality of product would reflect the price. Then I purchased an AC Milan jersey for, I think, $15 in Toronto and it was just as good as the shirts on the rack for $75.

I have yet to buy a black market hockey jersey so I cannot attest to how they compare.

I would be interested to know the actual cost of a jersey, though.

I've got a few of what I assume are black market Blackhawks and Cubs jerseys. My dad used to drink at the VFW where a dude that did some "sports apparel merchandising" for Reebok also hung out in Chicago. They're very high quality, and my Havlat jersey from way back in the day has been worn hundreds of times around the house with no evidence of wear.

Good quality stuff, the shoulder patch font they used for the letter C/tomahawk is a little thin, but besides that there's almost no difference that I can tell in quality or workmanship.

I'm assuming they're black market only because he paid $40 each for them, but they're of high enough quality that I'd never be able to tell. My Toews white one even has a Stanley Cup Finals patch that's just about the nicest/most detailed patch I've seen on a uniform of any type.

 

[Confucius]

I've got a few of what I assume are black market Blackhawks and Cubs jerseys. My dad used to drink at the VFW where a dude that did some "sports apparel merchandising" for Reebok also hung out in Chicago. They're very high quality, and my Havlat jersey from way back in the day has been worn hundreds of times around the house with no evidence of wear.

Good quality stuff, the shoulder patch font they used for the letter C/tomahawk is a little thin, but besides that there's almost no difference that I can tell in quality or workmanship.

I'm assuming they're black market only because he paid $40 each for them, but they're of high enough quality that I'd never be able to tell. My Toews white one even has a Stanley Cup Finals patch that's just about the nicest/most detailed patch I've seen on a uniform of any type.

Absolutely possible, I guess a person could make a knockoff Chevy by using Caddy components and handcrafted body parts made from some exotic material. Afterall if one can't get the exact component tbe replacement doesn't necessarily have to be inferior.

Just for a side note, there was a fire decades ago at a tie manufacturer, in the rubble were labels for over a dozen different designers. How it worked I don't know but it could have been as simple as do you guys guys at label A like this design? Yes? We'll stitch your label on them how much do you want if we put out a thousand? Now they know how much they have to sell them for. On to the next designer etc etc same manufacturer for numerous designers. Or they could have all been knockoffs, who knows?

 

[sjosty26]

It's just these prices have risen astronomically you know...

I used to buy jerseys on the regular I think the last one I purchased from NHL.com was the Rangers Winter Classic one vs. Philly. Lately I've had to resort to finding steals on ebay, not including the Lokomotiv jersey for charity.


Now when I buy a jersey I tend to go get a game used one from NHL auctions because mine as well at this point when there's not much of a difference in price anymore. I just can't bring myself to get one of the Chinese ones when I'm someone who can actually tell the difference

Although, I remember last summer when the Rangers first made the Stanley Cup they listed Premier Stanley Cup patch jerseys on the website for $69.99, and despite purchasing one at that price, they said they ran out of stock and just gave me a $10 gift card. I'm sure they made more and sold them for the full $350 though..

 

[cheswick]

The sports jersey is an item of outrageous cost. My assumption has always been that the logo is the primary drive as well as the market allows such a cost. If the black market jersey sales cut enough into the profits, the cost would likely come down. Then again, consumers could foot the bill for black market losses.

I used to shy away from black market apparel out of fears the quality of product would reflect the price. Then I purchased an AC Milan jersey for, I think, $15 in Toronto and it was just as good as the shirts on the rack for $75.

I have yet to buy a black market hockey jersey so I cannot attest to how they compare.

I would be interested to know the actual cost of a jersey, though.

I've seen some pretty bad ones at Jets games where the colours are off and the logo is too small. I think some of them were probably purchased right when the designs were released so they are closer now. Also it's probably a lot like a toupee. You only notice the bad ones.

 

[madhi19]

If you have a conscience, it better not to dwell too much on the slavery that support our modern world. Otherwise you might have a hard time sleeping at night.

 

[varsaku]

Reebok also has economies of scale so they can make it even cheaper than most manufacturers.

 

[Reign Nateo]

I work in equipment, you would be shocked at what this stuff is priced at wholesale...

 

[WingsFan95]

However there are knockoffs and then there are knockoffs. For example I'm sure there are some people who try to make their own jersey.

I know of a few "outlets" based in Ontario that make jerseys in small amounts for fair profit on each. I only know of the exact numbers off one of them:

Material cost=$5-10

Takes him between half to 2 hours to make them and he charges $100 flat at most. Obviously paying no taxes on that.

It's essentially the stitching and using the right material. There are a slew of custom jersey outlets where you can get similar colours to the teams if not right on the money and then it's just a matter of the patch. The guy above doesn't put the reebok logo or any other licensed tags, which both saves him time and doesn't get the attention from authorities. The people who buy from him just want a good quality jersey without paying $300 for it.

The fanaticism about "authenticity" is a bit much from some people. It's like my 10th grade math teacher pulling out a bill and asking us what exactly made it worth more than other bills? It's all about belief and perception.

Personally, I actually prefer getting a Canadian made product on decent wage.

 

[Confucius]

I know of a few "outlets" based in Ontario that make jerseys in small amounts for fair profit on each. I only know of the exact numbers off one of them:

Material cost=$5-10

Takes him between half to 2 hours to make them and he charges $100 flat at most. Obviously paying no taxes on that.

It's essentially the stitching and using the right material. There are a slew of custom jersey outlets where you can get similar colours to the teams if not right on the money and then it's just a matter of the patch. The guy above doesn't put the reebok logo or any other licensed tags, which both saves him time and doesn't get the attention from authorities. The people who buy from him just want a good quality jersey without paying $300 for it.

The fanaticism about "authenticity" is a bit much from some people. It's like my 10th grade math teacher pulling out a bill and asking us what exactly made it worth more than other bills? It's all about belief and perception.

Personally, I actually prefer getting a Canadian made product on decent wage./QUOTE]
thing to remember even if the jersey is made in a sweatshop in Bangledesh or China, where the worker makes a dollar an hr., that is the minimum wage in that country anyway. so no different than people working for minimum wage anywhere. at least it is nonviolent criminal behaviour.

 

[Demon Eyes]

well, can't be too much, you could go to one of those websites and order 11 jerseys for just over 300 or something like that and they throw in free shipping from china. well so I heard. meanwhile it might cost me 300 to ship a similar size parcel to china.

 

[WingsFan95]

Thing to remember even if the jersey is made in a sweatshop in Bangledesh or China, where the worker makes a dollar an hr., that is the minimum wage in that country anyway. so no different than people working for minimum wage anywhere. at least it is nonviolent criminal behaviour.

I'm just not a fan of out-sourcing. I know we wouldn't be able to buy as much if it was all domestically made but then I still use sweatpants bought a decade ago. Leather jackets are even better, etc.

Like it's been said, sports jerseys are priced because of licensing. In terms of material it's somewhat obscene I can get a leather jacket for $150 and a jersey costs $250.

I am actually going to be ordering 20 baseball jerseys for a team I sponsor and pants+shirt will cost me just over 1k.

 

[Confucius]

I'm just not a fan of out-sourcing. I know we wouldn't be able to buy as much if it was all domestically made but then I still use sweatpants bought a decade ago. Leather jackets are even better, etc.

Like it's been said, sports jerseys are priced because of licensing. In terms of material it's somewhat obscene I can get a leather jacket for $150 and a jersey costs $250.

I am actually going to be ordering 20 baseball jerseys for a team I sponsor and pants+shirt will cost me just over 1k.

Lucky players to have a sponsor such as yourself. Saw a show called the Liquidator, he bought 1,000 hockey jerseys (uncrested , unumbered ) for 50 cents each. Started flogging them at his store for 5 or 10 bucks each. He had a hard time selling them so he flipped them to another wholesaler for about 2.50 each. Just shows how inexpensive some stuff can be and people still have a hard time making money.

 

[WingsFan95]

Oh yeah the numbers stitching is costing me.

Crest pressed on the front. I got thicker twill for durability. Not getting new ones for 3-5 years.