When buying a new pair of shoes, what do you look for? Comfort? Style? Durability? Value?

You’ve probably heard of TOMS shoes and their “One-for-One” shoe drop program. Sure this is a great initiative that befits thousands of poor children around the world but is it profiting from westernized consumer vulnerability?

Currently, TOMS sells shoes from $55-$120 and generated over $9.6 million in revenue last year. Although there are no published production costs, it can be estimated to cost around $5-$10 a pair to manufacture in China and shipped to North America. Assuming TOMS gives away the least costly shoe, they are still making between 73% and 83% profit margins.

TOMS is able to sell their cheaply made and quick deteriorating shoes for a high price because consumers love to feel like they are helping the world. When the idea of buying a pair of shoes for a poor child comes to mind, it seems consumers throw out the value question in their shoe purchase.

I’m not saying to not give to the poor, just be aware there are more effective ways to use your dollar when you feel charitable. Rather than paying for a pair of shoes to be shipped to a poor country, along with the plane tickets for staff and PR members, I will just donate to a direct charity and be happy with my long lasting, cheap sneakers.

http://www.triplepundit.com/2012/04/problem-charity-model-toms-shoes/