there is no way AE is intentionally creating or ignoring the volume of seconds. the materials are no less expensive and i'm assuming they don't pay people less when producing a second. yes, it allows customers to get a lower entry point, but they wouldn't need to charge nearly as much for firsts if they didn't have to significantly mark down so many seconds. most of us are waiting for sales and buying pairs under $200. once you get a decent pair of seconds, it is hard to pay 100% more for firsts. this is not a desirable scenario for a business. i've paid full price for exactly one pair of more than 15 AEs. i've paid full price for all but one of 7 Aldens at over $700 a pop.
I am not saying they are doing it intentionally, only that there is less incentive than one might think to create an error free production process. If they cut out the 2nds and then are able to lower the price point, they risk devaluing the brand and losing out to competitors on perceived value. Essentially what they are doing now, possibly by accident, though I think by this point they will have run the numbers, is creating a loss leader (though they are still making considerable profit on 2nds) and encouraging more buyers into their product line.
A company that can eliminate defects and reduce rejects will save money over one that has many defects and rejects. Think about two AEs, one that produces flawless shoes and little to no rejects using almost the same techniques used now but with some improved process flow and another AE that is run the way they are now. Both are producing the same rough quantity of products using the same raw materials and more-or-less the same production line. The first has the choice to sell some of their offerings at a lower cost to provide a value option for outlets and the shoebank if they want. The other has no choice but to sell the rejected shoes cheaper .
In my experience, a good production process that eliminates end of the line (or late stage) rejects is always cheaper to run than one that has a lot of rejects. It just takes some modest investment in time and money up front to nail down your processes.
I agree with the sentiment of your post, just not the actual example. There is a cost associated with becoming the error free AE that you have not allowed for. The nature of that cost is undefined and therefore skews the result. Again, I agree with the spirit of your post though.
My guess is that AE has there production set up close to exactly how they want it. Even with my limited LEAN/SixSigma training, I am confident I could review their processes and make an appreciable dent in their error rate. However, my original point was that perhaps they have chosen to not tighten their manufacturing tolerances to the point that it would kill off the 2nds/ outlet business, might cost a sum of money that is unpalatable, require other changes to business practices that are unwanted at this time. This is clearly speculation, of course.
AE could fix their error rate if they wanted to. Of that, I have no doubt. The reason they have not done so is the only unknown.