What are the true costs of some of your favorite things?! Just how much does it cost a company to manufacturer that pair of Ace Gucci sneakers? What about those new Nike Air Vapormaxes?! Find out about the true cost to manufacturer these items and more in this video!

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Here’s how much your favorite things actually cost!

10 - Nike shoes
Just how much does it actually cost Nike to manufacture a pair of shoes? It costs Nike an average of only $28.50 to make a sneaker that will sell for $100. For example, the Nike Air Max 2016 cost $33 to make. But it sold at a retail price of $190. The Nike Free Run 2016 cost a mere $18 dollars to make but it sold for $100. The average 100 dollar Nike sneakers are sold to wholesalers at $50, meaning Nike will get back $21.50. Of course, not all of that is pure profit as there are other costs involved. The final profit on the 100 dollar sneaker comes to around $4.50 a shoe. Multiply that 4.50 by millions of shoes sold a year, and that’s a lot of money! One way that allows Nike to outearn their competitors is with their overseas sales in lower-taxed countries. Continued overseas expansion has helped Nike to continue to grow its bottom line. Quick, do us a huge favor and hit that like button because you like helping us out!

9 - Cosmetics
The cosmetic industry in the U.S. generates $50 billion in revenue each year. The price of lipstick, makeup and various skin care products isn’t driven by the cost of the products. The real cost for companies come in the form of marketing. Beauty companies get celebrities to market the products to their fans. And that costs money. A lot of it! For many people, price isn’t the deciding factor in their purchases. If they think one product is of higher quality than a cheaper one offered by a rival company, they're willing to pay more for what they perceive to be a better product. And this is precisely why marketing exists! It’s all about the perceived value, not the actual value something delivers. People just want to FEEL like their products work, even if it actually doesn’t! As a result, the average retail markup on cosmetics is about 50 to 60 percent. The big names in the beauty industry are able to achieve high gross margins between 60 and 80 percent! You can almost always find a cheaper drugstore product that will do pretty much the same job of an expensive cosmetic item.

8 - Daniel Wellington Watches
In the era of social media, it’s very likely that you’ve heard of Daniel Wellington watches. And chances are, you may know them better than any other watch brand that’s been in the watch industry for many more years! But here’s the story that’s not being told by all the Instagram influencers you see wearing Daniel Wellington watches. They’re mostly priced in the $149 to $229 dollar range – pretty affordable for a great watch, right? Well, it’s a good price for a nice looking watch. However, many people would disagree on the word ‘great’. The quartz movement is made in Japan while the watch is assembled in China. The materials used don’t justify the price that it’s sold at. The cases are thin and barely waterproof. With such a cheap manufacturing process, you can actually buy one with the same design at just around $10. Is it worth paying extra for just the name? Are you enjoying learning with this video? Don’t forget to hit the subscribe button and the notification bell! Because you don’t want to miss our upcoming video on the most counterfeit items! Filip Tysander, the founder of Daniel Wellington watches, has built himself a fortune. But despite the crazy growth of his company, he hasn’t done anything to change or improve the quality of his watches. But really, does he have to if people continue buying the watches? The company would much rather focus much more on marketing and branding, rather than improving the quality of their watches!

7 - Eyewear
For many people, glasses and sunglasses are a basic necessity. But if we’re keeping it real, designer eyewear can get really expensive! Designer frames can easily cost north of $400, while standard glasses from a company such as Pearle Vision can start at around $80. But it turns out that these prices are marked up, way up, depending on the brand. There’s essentially just a few select manufacturers for designer eyewear. The biggest eyewear company is the Italian group Luxottica. They own and control a large portion of the eyewear market.