It has been seventeen years since Michael Jordan participated in an NBA game, but his Jordan brand shoe remains the number one seller. The irony is the fact that Jordan pioneered the shoe endorsement deal. Other players before him had shoe deals, but he was the player who made the shoe endorsement lucrative. Jordan made it possible for a college basketball star to leave college and sign a multi-million dollar shoe contract before scoring a single point in the NBA.
During his three year run at Louisiana State University, Shaquille O’Neal was the most dominant big man in college basketball. The 7 foot 1 center was big, physical, and athletic. O’Neal was a two-time All-American, and he was voted the 1991 Associated Press College Basketball Player of the Year. After three seasons with LSU, Shaquille O’Neal decided to forgo his senior year and declare for the 1992 NBA Draft. Twelve days prior to being drafted, he signed a multi-million dollar shoe deal with Reebok.
As he transitioned to the NBA, O’Neal’s playing style remained physical and dominant. Life was good for Shaquille O’Neal as he had money coming in from his NBA contract and his shoe deal. His father stressed the fact that an NBA career wouldn’t last forever. With that in mind, Shaquille O’Neal viewed the monetary funds from his shoe deal as extra cash just in case he did everything wrong. He felt as though he needed to be technical in regards to the marketing of his signature shoe. “Nobody is ever going to beat Mike (Michael Jordan). You know how it is on the block, if you can’t beat them you can be next to them. Wherever his shoe was at in Foot Locker or Foot Action, I made sure my shoe was next to his,” O’Neal stated. Location was key as Shaq’s $100 pair of Reebok sneakers performed well in the sales category on an annual basis. Shaquille O’Neal’s module for selling his basketball shoes would experience a drastic change after a verbal exchange with a disgruntled female fan.
The woman was cursing at Shaq due to the fact she was upset about the high price she would have to pay to buy her son a pair of Shaq’s signature shoes. O’Neal spoke in regards to the fact he had nothing to do with the pricing of the shoes. He proceeded to pull a wad of cash out of his pocket and told the woman she could go buy whatever she wanted. The woman snatched the cash out of O’Neal’s hand and told him somebody needs to make an affordable shoe.
The woman gave O’Neal something to think about as he reminisced back when he was a young boy how hard it was to ask his parents for $100 to buy a pair of shoes. For many families paying that price for a pair of shoes isn’t included in the budget.
The encounter with the woman motivated Shaq to end his deal with Reebok and start his own shoe line. He had the resources to start his own shoe line, but he needed a distributor. “Families don’t make enough to where kids can buy $100 shoes. A lot of people shop at Walmart. So I did a deal with Walmart.”
Shaquille O’Neal changed his business module because he wanted to offer a more affordable shoe. The price points of his signature shoe took a significant drop. His new line of shoes were $60.00 to $70.00 dollars cheaper. Shaq made the price consumer friendly. Since starting his own line in the late 90’s, Shaquille O’Neal has sold over 200 million pairs of shoes. What started as a sacrifice evolved into a win-win situation. Fans were able to purchase an affordable shoe that was endorsed by an NBA great, and the money Shaquille O’Neal lost in profit margin was regained courtesy of volume sales.
