LaVar Ball is offering the debut basketball shoe for Big Baller Brand for the price of $495. If you want a pair signed by his son, Lonzo, those will cost you $995. I’ll come right out and say it. LaVar doesn’t understand how this stuff works. There’s market value and then there is intrinsic value. Both are important components in pricing an item and that is what seems to have escaped the mind of LaVar.
After introducing the shoe and its price, LaVar, as has often been the case, found himself subjected to harsh criticism. The question on most everyone’s minds was how could he charge $495 for a shoe from a relatively unknown brand? In LaVar’s mind, that was an easy question to answer.
“I figure that’s what the shoe is worth,” Ball said. “When you are your own owner you can come up with any price you want.”
LaVar isn’t wrong when making either of those two statements. When you’re the owner of a company, you can charge whatever price you want for your product. And I can’t deny his belief that $495 is what his product is worth. However, there is (usually) a little bit of math involved when setting the price for a product. I anticipate a market correction for the price of the Big Baller Brand shoe. And it there’s not, his company will soon be a distant memory.
Intrinsically speaking, LaVar believes that he’s set an accurate price. His belief, based on little to no market research, is that Big Baller Brand has already surpassed Nike, Under Armour, and Adidas. Based on 2015 estimates, the brand value of Nike is $15.9 billion, Adidas’ is at $6.2 billion, and Under Armour’s is at $5 billion. Sure, LaVar, the intrinsic value of Big Baller Brand is better than these established competitors that you mocked.
LaVar also mocked Foot Locker while ridiculing Nike, Under Armour, and Adidas. However, using Foot Locker as a gauge of market value for basketball shoes, it’s seen that the most expensive basketball shoe for Nike is $365.99, Under Armour’s most expensive shoe is $149.99, and Adidas’ priciest basketball shoe is $159.99. Based on the price point for the shoe, LaVar sees his product as a boutique shoe and that’s why he scoffed at the idea of selling Big Baller Brand at Foot Locker. But he also considers the Big Baller Shoe to be a legitimate basketball shoe so using Foot Locker as a measure of market value is accurate.
And then there is LaVar’s marketing message.
Big Baller’s loose! If you can’t afford the ZO2’S, you’re NOT a BIG BALLER! 💰
— Lavar Ball (@Lavarbigballer) May 4, 2017
LaVar isn’t wrong. Every product isn’t for everyone. But Big Baller Brand isn’t even a big baller. As Ric Flair says, “To be the man, you have to beat the man.” Right now, “The Man” is Nike, Under Armour, and Adidas. LaVar at least needs to turn a single dollar of profit before running his mouth.
Big Baller Brand has a huge social media presence thanks to LaVar always having a statement to make about his fledgling business. Some love LaVar while others, such as myself, find him to be a loud-mouthed ringmaster for himself. But whether the publicity is good, bad, or indifferent, any press is good press. Will it be enough to generate a profit for his $495 debut shoes? Time will tell but I’m not writing off Nike, Under Armour, or Adidas just yet.
E-mail Seth at [email protected] or follow him on Twitter @SethMerenbloom.
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