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How much do you think it costs to make a pair of Nike shoes in Asia?

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Re: How much do you think it costs to make a pair of Nike shoes in Asia?

#91

Post by eastbound »

edm0nd wrote: post #75
rayiner wrote: post #42

Americans need to get over their view of “Asia” as being about making shoes. When I was working in engineering in the early aughts, we mocked the Chinese as being able only to copy American technology. Today, China is competitive with or ahead of America in key technology areas, including nuclear power, AI, EVs, and batteries. We need to anticipate a future where China is equal to America on a per capita basis, but f…

[flagged]

Infringement is good for the economy. Even our nations have progressed at a time when none of that was enforced, and are only strolling since then (or, as you may aptly say, rent-seeking).

PS: For those of us in software who wonder whether an economy without IP could exist, entire software industries exist without copyright protection, one trick for example is to provide the service behind the cloud, so customers never have access to the source code; meanwhile OSS, which is based on preventing restrictions on sharing, is the eighth wonder of the world, which has proven that IP is unnecessary to software.

Re: How much do you think it costs to make a pair of Nike shoes in Asia?

#92

Post by SoftTalker »

Cerium wrote: post #41
megaman821 wrote: post #25

For me this glosses over on why would see the same 100% markup on the customs duties as they rise. A 100% at a low tariff rate is just pricing in the increased paperwork and accounting, but at a super-high tarrif rate this become pretty unjustifiable. Why is not more likely customs becomes mostly a passthrough cost?

It is a passthrough cost because of the business models. In this example the importer (Nike) is paying the cost, and then retailers are buying the product from them at a price that includes the tariff. The retailers don't care why the shoe is $75 or $50. A retailer is concerned that there are customers willing to pay a price which enables them to make a profit. For most retail businesses that price needs to be about…

> if we switched from an import tariff to a foreign goods sales tax we could avoid this particular problem.

How are these materially different in terms of what the end consumer pays?

Re: How much do you think it costs to make a pair of Nike shoes in Asia?

#93

Post by SoftTalker »

TheJoeMan wrote: post #63
megaman821 wrote: post #25

For me this glosses over on why would see the same 100% markup on the customs duties as they rise. A 100% at a low tariff rate is just pricing in the increased paperwork and accounting, but at a super-high tarrif rate this become pretty unjustifiable. Why is not more likely customs becomes mostly a passthrough cost?

I think the shoe graphic after the $75 cost is disingenuous to be still shown as $100 base instead of $150 base. This would show that this basic "100% markup" is just scalping. Expenses and overhead would not double so it's just more in the profit bucket.

If your inventory now costs you $25 more per unit, your carrying costs are higher.

Re: How much do you think it costs to make a pair of Nike shoes in Asia?

#94

Post by giardini »

gorfian_robot wrote: post #74
tmaly wrote: post #57

I think the one thing I am not seeing much discussion on is, will the end consumer pay for these $150 sneakers or will they simply switch to lower cost alternative brands?

fun fact: sneakers are already $150. went shoe shopping at a "sketchers warehouse" and found a pair that fit well and noped them back on the shelf when I checked the price.

My sneakers have been $200* for the past 5 years but then they're made in the USA. It's time to buy a new pair.

* - I have a large foot and believe I'm paying primarily for the materials in my shoes, which easily weigh twice what my friends' shoe do!

Re: How much do you think it costs to make a pair of Nike shoes in Asia?

#95

Post by pfortuny »

ty6853 wrote: post #86
hx8 wrote: post #83

> But if we bump the cost of freight, insurance, and customs from $5 to, say, $28, then they wholesale the shoes to Footlocker for about $75. And if Footlocker purchases Nike shoes for $75, then they retail them for $150. Everyone needs to fixed percentages to avoid losses. I don't understand this paragraph. If Footlocker was okay with $50 profit/shoe, why do they need to claim $75 profit/shoe in their costs per shoe…

Because the market recognized value add is the capital investment and returns, including the credit basis on which inventories flow. These people are operating on a per $ basis, not a per shoe basis. If the margins % lower then the capital will flow to something else more profitable and then prices rise until the margins are relatively flat across similar productive investments.

Gains and losses are measured in % not in quantity because a dollar (or ant currency) has no fixed value.

Sorry: I intended to reply to the grandparent.

Re: How much do you think it costs to make a pair of Nike shoes in Asia?

#96

Post by lossolo »

bpt3 wrote: post #59
rayiner wrote: post #42

Americans need to get over their view of “Asia” as being about making shoes. When I was working in engineering in the early aughts, we mocked the Chinese as being able only to copy American technology. Today, China is competitive with or ahead of America in key technology areas, including nuclear power, AI, EVs, and batteries. We need to anticipate a future where China is equal to America on a per capita basis, but f…

Their population is declining, and they are a long way away from parity with the west on a per-capita basis. I think China missed their opportunity. Also, the UK hasn't dominated finance for a century and has never been dominant in services, so it doesn't seem like an apt comparison.

The first effects of their population decline will be felt around 2050 by UN estimations. What do you think they’ll be doing for the next 30 years? Considering they already ship more robots than the rest of the world combined, I don't think that will be a huge problem.

Re: How much do you think it costs to make a pair of Nike shoes in Asia?

#98

Post by Symbiote »

darknavi wrote: post #62
ersiees wrote: post #44

So, 100$ Nike shoes will soon be 125$.

The specific (fictitious) example they gave was $100 -> $150 due to a ~$23 tariff. > But if we bump the cost of freight, insurance, and customs from $5 to, say, $28, then they wholesale the shoes to Footlocker for about $75. And if Footlocker purchases Nike shoes for $75, then they retail them for $150. Everyone needs to fixed percentages to avoid losses. The point being that many parts of the supply chain don't oper…

> The point being that many parts of the supply chain don't operate on fixed costs and instead percentages.

That's how it was working in most wealthy countries, where tariffs were generally low or very low.

I don't see why it must continue to work that way in the USA with 50% or 100% or more tariffs. If Footlocker wish to charge double the post-tariff price, that leaves room for a competitor to change double the pre-tariff price.

(Or double the pre-tariff plus a tiny bit, to account for the increased cost of insurance, theft etc.)

Re: How much do you think it costs to make a pair of Nike shoes in Asia?

#99

Post by Sonnigeszeug »

edm0nd wrote: post #75
rayiner wrote: post #42

Americans need to get over their view of “Asia” as being about making shoes. When I was working in engineering in the early aughts, we mocked the Chinese as being able only to copy American technology. Today, China is competitive with or ahead of America in key technology areas, including nuclear power, AI, EVs, and batteries. We need to anticipate a future where China is equal to America on a per capita basis, but f…

[flagged]

You do understand that Chinese Companies can easily just hire people from abroad?

You also do know how many companies moved their knowledge to China on purpose right?

The knowledge on how to build things, is learnable even if you don't just 'hack' everything.

And there is a lot of signaling happening, that china has surpassed American and European companies in R&D. CATL for example.

Whatever China did or still does, its a land with 1.4 Billion people vs. 340 Million.

Also we achieved, around the globe, a level of expertise around so many topics, that we do not talk about huge differences. If an engine from china is a few % less efficient than the high techv ersion from germany, but the labor cost is fundamental different, than you just loos.

And the prices are significant different. So significant, that if USA doesn't change, it will not be able to compete.

Even a 104% tarif does not change the competitivness of China in a lot of areas.

All of this is only a problem in capitalism btw. and with the upcoming robot revolution, the 'richness' of manufacturing will never again go to the workers ever. This time is over. We need to figure this out

Re: How much do you think it costs to make a pair of Nike shoes in Asia?

#100

Post by Sonnigeszeug »

bpt3 wrote: post #59
rayiner wrote: post #42

Americans need to get over their view of “Asia” as being about making shoes. When I was working in engineering in the early aughts, we mocked the Chinese as being able only to copy American technology. Today, China is competitive with or ahead of America in key technology areas, including nuclear power, AI, EVs, and batteries. We need to anticipate a future where China is equal to America on a per capita basis, but f…

Their population is declining, and they are a long way away from parity with the west on a per-capita basis. I think China missed their opportunity. Also, the UK hasn't dominated finance for a century and has never been dominant in services, so it doesn't seem like an apt comparison.

'declining' on which level?

China will surpass USA from a GDP Point of view in 2035.

China surpassed Germany as industry machines export in 2018.

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