COST STRUCTURE
The cost structure at GIO Sports is designed to support efficient operations, high-quality product delivery, and strategic growth in the competitive pickleball market. Each cost category reflects the diverse resources and investments required to maintain product quality, ensure seamless logistics, and drive effective marketing and sales efforts. By organizing costs into distinct categories—production, logistics, marketing, technology, personnel, and compliance—GIO Sports ensures a balanced approach to budgeting that prioritizes both customer satisfaction and operational sustainability. This detailed cost structure allows GIO to allocate resources where they generate the most value, positioning the brand for long-term success and scalability.
PRODUCTION COST
Paddle Manufacturing Costs
- Suppliers in China: Paddle production costs vary between $12.50 and $22.50 per unit, depending on the supplier and the type of paddle (PRO SERIES, LITE SERIES).
- Variable Costs: These include additional costs for order volume, product customization, and quality adjustments.
Outsourcing of Complementary Products
Costs associated with the manufacturing of sportswear, accessories, and kits, which are generally outsourced to third parties. Here it is important to consider that these costs will depend on the production volume and the characteristics of each product.
Quality Control Costs
Implementation of audits and quality controls in the factory, ensuring that the paddles meet the required standards. This may represent a small additional percentage per manufactured unit.
LOGISTICS AND TRANSPORTATION COSTS
International Transportation Costs
The cost of shipping pallets and products from factories in China to the U.S. Costs can vary depending on the method of transportation (air or sea) and the quantity of products. It is critical to consider transit times and how they impact costs.
Local Transportation Costs
Distribution of products from warehouses to retailers or directly to customers. These costs can include local carriers and courier companies.
Storage and Inventory Management
Storage costs include renting warehouse space in the U.S. and technological tools to manage inventory, such as stock management software.
MARKETING AND SALES COSTS
Amazon Advertising and Promotion
Expenses on PPC campaigns to highlight products on Amazon. This cost can vary depending on the active marketing campaigns, the number of products being promoted, and the duration of the campaigns
Social Media Marketing
Expenses associated with promotion on social media such as Facebook and Instagram. Costs on paid campaigns, influencers, and collaborations.
Event Participation Cost
Participation in local pickleball tournaments and sports fairs to increase brand visibility. This includes event sponsorship, promotional material, and product demonstrations.
E-COMMERCE TECHNOLOGY AND PLATFORM COSTS
Own E-commerce Maintenance
Costs associated with maintaining GIO’s online store, including payment platforms, web hosting, and site optimization for online sales.
Subscription to Digital Marketing Tools
Costs for subscriptions to marketing and analysis tools, such as Google Analytics, marketing automation tools, and CRM.
PERSONNEL AND OPERATION COSTS
Salaries and Fees
Salaries of employees who manage the logistics, sales and marketing, as well as fees for external consultants or advisors, such as those related to the supply chain or digital marketing.
Administrative Costs
These include expenses such as office rent, utilities, taxes, insurance, and other costs related to the daily management of the company.
CUSTOMS COSTS AND REGULATIONS
Import Taxes and Customs
Costs associated with importing products from China to the U.S., including import fees, taxes, and other duties.
Regulatory Compliance
Expenses related to product certification, compliance with safety regulations, and quality standards in both countries.