There comes a time when you need to stop speaking in abstracts and start looking at the numbers. It’s like when you’re starting a relationship: after a few carefree dates, there comes a moment when you talk about the future. Or the bills. Well, today we’re talking bills. Or more precisely, what a running shoe really costs. And what it costs to produce a luxury handbag.
Spoiler: neither one is “tricking” you. But both — surprisingly honestly — sell you a promise. The difference? One makes you work for it. The other looks down at you and smiles.
The Running Shoe
Let’s take an average-priced running shoe. Retail price: €160, maybe even €180 (everything’s more expensive in 2025).
Here’s a rough breakdown of that price (these are average figures and can vary, so take them with a grain of salt):
-
Industrial cost (materials, labor): €32–40
-
Shipping, customs: €6–8
-
Price to retailer: around €80
-
Marketing and R&D: €10–15
-
Company overhead (salaries, utilities, offices): €20–25
-
Brand’s net profit: €5–8
-
Retailer’s margin: 50–60% of the final price
Let’s do the math. A shoe that costs you €160 doesn’t bring the brand an outrageous profit, at least not compared to the final price — or to what you might have imagined. And the rest? It’s what makes the shoe exist. And makes sure it gets to you.
Once again: the cost of a shoe is the result of many variables and, above all, the combined contributions of many skilled people. Among those costs are also the ones that make you want the shoe in the first place. The infamous storytelling. The story that tells you, “This one will make you fly.” Literally or not.
The Birkin: The Art of Subtraction
Now let’s hop onto the magic carpet of desire. Soft landing in Rue du Faubourg Saint-Honoré, Paris. Home of Hermès. Let’s talk Birkin. Price? Ten thousand euros. Or more.
Industrial cost? Around €1,200. Then add:
-
Distribution and retail: €2,000
-
Marketing and positioning (translation: mythic aura): €1,500
-
Company overhead: €1,500
-
Estimated net profit: €3,800–4,800
-
Gross margin: over 80%
In this case, what you’re paying for isn’t just what it is — but what it represents. No one buys a Birkin to carry their salad in a Tupperware. Or maybe they do, but only to show that they can.
Face to Face
Let’s end this (admittedly unfair) comparison by putting the two side by side. We chose these extremes because sometimes swinging between such different values helps you better grasp the scale of things. In both cases, we’re talking about consumer goods with precise purposes and distinct auras. And wildly different price tags.
|
Running Shoe (€160) |
Birkin Bag (€10,000) |
|
|---|---|---|
|
Industrial Cost |
€32–40 (20–25%) |
€1,200 (12%) |
|
Distribution |
€6–8 |
€2,000 |
|
Marketing |
€10–15 |
€1,500 |
|
Net Profit |
€5–8 |
€3,800–4,800 |
One is built to carry you through long runs. The other lets you walk into a Michelin-starred restaurant without saying a word.
Who profits more?
It depends. If you measure profit in euros, the bag wins hands down. If you measure it in kilometers, the shoe takes the lead. That’s the point: neither one is lying. They just speak different languages. One sells access, the other performance.
Luxury needs to be inaccessible to work. If it doesn’t make you feel excluded, it loses its edge. The Birkin, as many have rightly pointed out, runs on an economy of induced scarcity: you can’t just walk into an Hermès store and walk out with a Birkin and €10–15K less in your account. You have to get on a waitlist. And wait. Months, sometimes years. It’s zen marketing: absence becomes presence.
The running shoe, on the other hand, has a less glamorous but more honest job: it has to give you something you can feel. Even if just for 600 or 800 kilometers. And it has to do it now.
Is it worth it?
It’s not about value — it’s about alignment with yourself. If a shoe gives you that mental push to run at 6 a.m., maybe it’s worth every euro.
If a handbag makes you feel like Margot Tenenbaum for just five seconds, maybe that makes sense too. Or maybe not. But it’s your call.
The market makes offers, like a romantic algorithm. And you decide.
Speaking of decisions, allow me one final note: for years we’ve seen outraged comments about €250–300 price tags on carbon-plated running shoes. In absolute terms, that’s a lot of money — but as we’ve seen here, even that price has a certain logic, at least for current-year models (you can often find past seasons deeply discounted). And let’s not forget another truth: no one’s forcing you to buy them. The market still offers excellent models at half the price — or even less.
Let’s never forget the greatest and most overlooked power consumers have: the power not to consume.