Are they paying people $14 to then in turn purchase an $11 shoe? Why can't I just keep the $14?

More accurately, they’re paying people $14 to buy a $20 shoe that cost $9 to make. And they’re not just “keeping the money” because they’re hoping to be valued on a revenue multiple.

They're paying 14 to get people to purchase a 25 dollar shoe. Profit is after Cost of revenue.

Is that unusual?

Maybe not unusual for a young, growing company, but its obviously not sustainable for each dollar in profit to cost more than a dollar in sales/marketing effort. Thats a negative ROI.

You're confusing profit and revenue

Gross profit = the profit from a specific business activity, in this case, sales, when looking solely at sales revenue less the specific costs of generating that revenue (aka COGS).

Net profit = the profit from the overall business, taking into account all sources of income and all expenses.

Sales and marketing are usually not treated as part of COGS, because they are not a necessary expense (in this context, COGS would include things like materials and production costs).

Many investors think in gross profit terms rather than revenue terms, because gross profit is the actual “cash in” from a given sale.

That had become less common because software has famously high gross margins that aren’t necessarily linearly tied to revenue, but allbirds are shoes.

When you’re growing that gross profit by 10% and you’re not locking customers into long term revenue agreements?

No comment on usual or not. Definitely not “good”.