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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?

#101

Post by giardini »

dboreham wrote: post #84
myrmidon wrote: post #43

Earlier quoted context omitted.

Self sufficiency is just not a credible argument here. This is about consumer footwear, not agriculture (nor all of manufacturing). The US (and most other nations that can afford to) is perfectly used to throwing ~$20 billion at the sector to keep local agriculture operational. We did not do this for literally every industry in the past because we had (and have) neither the idle workforce to do this, nor does the loc…

The shoes aren't even needed. Growing up in Scotland (not poor) in the 1970s I had one pair of shoes. When they wore out my mother would buy me a new pair. Today in the US I have so many pairs of shoes I don't really have space to store them and sometimes end up buying a new pair of shows I already own because I can't keep track of what's in the closet. Btw the one thing that will be left to show is a wider realizati…

dborehamsays "Btw the one thing that will be left to show is a wider realization that it's a bad idea to elect a crazy person."

Regret to inform that all of them are crazy.

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

#102

Post by pjc50 »

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…

> US will find itself in the same position the UK is in now

The thing is .. there's a point here, but it's not at all tied in with physical products. People are obsessed with one side of the ledger while refusing to see the other. Most of the stuff the UK is struggling with (transport, healthcare, energy) are "state capacity" issues. Things where the state is unavoidably involved and having better, more decisive leadership and not getting bogged down in consultations, would make a big difference.

The UK stepped on its own rake because it was obsessed with tiny, already vanished industries like fishing. Fishing is less profitable for the whole UK than Warhammer. It's not actually where we want to be. While real UK manufacture successes (cars, aircraft, satellites, generators, all sorts of high-tech stuff) get completely ignored. Or bogged down in extra export red tape thanks to Brexit.

To improve reality, we have to start from reality, not whatever vision of the past propaganda "news" channels are blathering about.

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

#103

Post by kjkjadksj »

xienze wrote: post #9
JSR_FDED wrote: post #4

It’s like people excited about the new datacenter being built in their town, think of all the jobs that will bring they cry. Nobody realizes it takes 6 people to run a datacenter. Bringing “manufacturing back to the US” is a fool’s errand. The future of manufacturing is automation, not jobs.

I think you're missing that the bigger value is having the manufacturing on your home soil instead of depending on being in the good graces of China.

You always depend on someones good graces. What difference does it make if they are an american you are dependent on or a chinese person? Still a human at the end of the day. Its the political leaders that want you to say that an apple and an apple are different species. It doesn’t reflect the reality that we are all equivocal humans on earth. The sooner we get out of our nation state well of stability as a species, the sooner we advance technologically to the next level as a species.

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

#104

Post by milesskorpen »

aimor wrote: post #89

Trying to summarize the summary for myself From a $100 shoe that sells for $76: - $24 goes overseas (22 cost, 2 freight) - $8 goes to the US gov't (3 import, 2 Nike tax, 3 Footlocker tax) - $33 goes to US employees or businesses (5 Nike marketing, 11 Nike expenses, 17 Footlocker expenses) - $5 goes to Nike (11% return) - $6 goes to Footlocker (8% return) But now with 100% tariffs, it's a $100 shoe that sells for $100…

The piece to add there is that all this money is getting paid by the consumer. The overseas piece doesn't change, same number of US dollars going to the other country. The $24 increase in cost is paid by the US consumer.

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

#105

Post by pfannkuchen »

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.

That doesn’t really make sense to me.

The market cares about dollar returned vs dollar invested. If some piece in the middle of the chain goes up and end customer prices go up as well, that doesn’t directly affect investors at all.

The way it could and likely will affect investors is if people start buying fewer shoes, but that is a different process than what you are describing.

If I’m off base can you help me understand what you are saying?

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

#106

Post by throw310822 »

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]

> Yeah, it's real easy when you employ an army of nation-state hackers

No it's not, even if it were true. Is it really that hard to admit that the Chinese people are industrious, smart, ambitious and have extremely high education level? And that the state has directed the development of the country wisely in the past 40 years?

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

#107

Post by lossolo »

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]

> Yeah, it's real easy when you employ an army of nation-state hackers to break into and steal R&D and tech from US Fortune 500 and aerospace companies to then use it internally and give to private industry in China.

All of this is old, tired news. They're leading in many areas now, so at least in the fields where they lead and innovate, they couldn’t have "stolen" anything.

If you would like to get more up to date:

1. "China has become a scientific superpower"

https://www.economist.com/science-and-technology/2024/06/12/...

2. "China Is Rapidly Becoming a Leading Innovator in Advanced Industries"

https://itif.org/publications/2024/09/16/china-is-rapidly-be...

3. "How Innovative Is China in Nuclear Power?"

https://itif.org/publications/2024/06/17/how-innovative-is-c...

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

#108

Post by pjc50 »

greatgib wrote: post #5

All around the "developed world", the shop/retailer/supermarket/distribution part of the price of a product is around 50%. Whatever the product or its price. I'm wondering if part of our issue with crazy inflated prices despite low margin for industry and manufacturing actors is not because of this abused margin for retailers. That have also a huge power as it is difficult to negotiate when you depend on your product…

A lot of that retailer margin goes into (a) wages, i.e. the jobs that everyone is supposedly trying to create, and (b) rent.

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

#109

Post by myrmidon »

Clubber wrote: post #70
myrmidon wrote: post #60

Earlier quoted context omitted.

> I don't know if increased volume will decrease the prices by much, they're only higher than premium imports by a little bit. I don't think its reasonable to expect lower prices for domestic production at all, because the demand for domestic products is only going up (from people that used to buy Vietnamese Nikes). Personally I think the whole tariff experiment is predictably going to fail, because "increased self s…

I've had it explained to me that now that manufacturers won't sell to China because of retaliatory tariffs, they're more product to sell domestically which would push down prices. Less demand due to tariffs from China = lower prices.

Maybe there are some products that this argument works for, but certainly not footwear I'm sure.

The US exports ~1 billion worth of shoes per year, and imports ~25 billion (mainly from Vietnam and China), according to https://www.usitc.gov/research_and_analysis/tradeshifts/2023...

I also think the argument is bad in general, because more/similar exports than imports would only really hold for the countries least affected by the new tariffs, anyway.

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

#110

Post by bpt3 »

vlovich123 wrote: post #79
bpt3 wrote: post #59

Earlier quoted context omitted.

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.

> I think China missed their opportunity. I think so too prior to the Trump tarrifs. Now their influence abroad is picking up steam again, with former WW2 enemies now becoming trade allies. I think this has reinvigorated their opportunity.

China hasn't changed, as their new "partners" will be reminded of soon enough.

I suspect they will squander the opportunity the US unforced error has provided, but we'll see.

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