This isn't what it says in the thread. It's saying Nike and retailers need to maintain their markup rate on their unit cost.
> And if Footlocker purchases Nike shoes for $75, then they retail them for $150. Everyone needs to fixed percentages to avoid losses.
The problem with your breakdown is you're mixing unit costs and net profit in a way that doesn't work. For example, say after increasing the price in accordance with your summary, the volume of sales halved (just to pick an easy number). Then the $17 marked as "Footlocker expenses" increases, likely to around $34, and Footlocker's profit becomes -$10. The absolute expenses haven't changed. They're still paying the same amount for their employees and storefronts. But with half as many shoes sold, the expense per shoe is doubled.
It's not just sales volume that affects the $17. Other costs like credit card fees or shrink scale with the unit cost as well.
> And if Footlocker purchases Nike shoes for $75, then they retail them for $150. Everyone needs to fixed percentages to avoid losses.
The problem with your breakdown is you're mixing unit costs and net profit in a way that doesn't work. For example, say after increasing the price in accordance with your summary, the volume of sales halved (just to pick an easy number). Then the $17 marked as "Footlocker expenses" increases, likely to around $34, and Footlocker's profit becomes -$10. The absolute expenses haven't changed. They're still paying the same amount for their employees and storefronts. But with half as many shoes sold, the expense per shoe is doubled.
It's not just sales volume that affects the $17. Other costs like credit card fees or shrink scale with the unit cost as well.