Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

twitter.com

Post reply on HN
Print view View original

231–240 of 1001 posts

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

#231

Post by crazygringo »

rvnx wrote: post #179
crazygringo wrote: post #159

Earlier quoted context omitted.

It's a great question, and the answer is that you're missing the change in demand. Let's say Foot Locker tries to keep the same absolute profit $50 and retails the shoes for $125 instead of the previous $100. Now demand goes down, because more people will skip a new pair of sneakers. So Foot Locker's absolute profit goes down . But they still have the same fixed retail space, advertising, and labor as you said. So to…

There is also the fact that with each USD you can buy less and less as a private person. So to have the same quality of life, you expect higher returns. Which mean that you will choose to invest into companies that offers a better return, and for that, these companies will have raise their prices, which in turn, spirals into additional price raises.

That's not the fundamental cause, though. Companies can't just raise prices to achieve whatever return they want, because once you go above the profit-maximizing price, the fall in demand outweighs additional revenue per item, and once you go above competitor's prices, demand similarly falls.

Yes investors look for maximal returns, but those are limited. Fundamentally the ceiling is set by demand and by your competitor's prices.

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

#233

Post by ajb »

pjc50 wrote: post #102
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 lead…

There are two parts to the fishing thing. From a pure economic perspective, fishing is insignificant. But within living memory obtaining food was a national security issue for the UK (during world war II). In a world in which states look not to grow their economy, but to harm others - and guess what, that's where we just arrived - not all industries can be considered purely on their revenue. Man cannot live on warhammer alone.

We need to distinguish between paying over the odds to keep industries which are essential to have in an antagonistic scenario, from loss-aversion and nostalgia for industries which don't provide as much employment as they used to.

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

#234

Post by mclau156 »

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…

Every single person in the supply chain has a lever they can pull to change price, except the end consumer

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

#235

Post by bojan »

bombcar wrote: post #184
myrmidon wrote: post #171

Earlier quoted context omitted.

> Fishing is less profitable for the whole UK than Warhammer. This sounded completely insane to me. I tried to look up numbers and found that Games Workshop brings in > 0.5 billion in revenue (!!), compared to all of UKs fisheries at 1 billion-ish (profit margins are, as you'd expect, pretty favorable for the plastic figurines that they don' even paint for you). Thanks for this interesting fact.

There's a problem with just directly comparing them - because JKR probably brings in more revenue to the UK than fishing, with Potter copyrights. But most of that revenue goes to JKR, whereas most of the fishing revenue may end up in "working class" people's pockets.

I do wonder how much of fishery money ends up in the working class pockets. I assume the surviving companies survived because they have economy of scale, meaning most of the profits goes to corporate. If somebody has the numbers, I'd like to know.

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

#236

Post by blacksmith_tb »

tayo42 wrote: post #174
lossolo wrote: post #132

Earlier quoted context omitted.

This. Anyone who doesn’t believe it — please go spend some time in Shenzhen, Shanghai, or similar cities, like I did. I just got back from China. I’ve been (also lived and worked) to the U.S. many times, and I can confidently say that China’s tier-1 cities are on another level when it comes to development and QoL (and not only T1 cities, I was in smaller regions in the north too). It’s also incredibly clean, super sa…

That's been my current dream trip for a little. I think it woukd be so cool to ride the trains around the country and see what it's really like there. Learning the language is hard though

I took a year of Mandarin as an undergrad, speaking is doable, reading and writing is hard, but Google Translate & Co. would make that less daunting now.

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

#237

Post by josefresco »

jimt1234 wrote: post #178

Sorta related: Those Crocs/clogs shoes have been extremely popular for a few years now. ... I've always wondered how much it costs to make that type of shoes (Crocs/clogs) - it can't cost more than $1 to make most of them; they're just injection-molded, right?

You can buy Croc knockoffs at the "Dollar Store" yet Crocs still exists. Why? Is it purely first-mover advantage/brand or is there an engineering edge?

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

#238

Post by lamp_book »

xienze wrote: post #17
vidarh wrote: post #15

Earlier quoted context omitted.

Forcing China to become more independent of exports to the US also means China will care less about being in the good graces of the US. It cuts both ways.

Except for the whole military superpower thing. The US is actually in a somewhat unique situation compared to other countries.

See the threads on the state of US shipbuilding.

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

#239

Post by _DeadFred_ »

rayiner wrote: post #52
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.

> Bringing “manufacturing back to the US” is a fool’s errand. The future of manufacturing is automation, not jobs. That’s probably correct. But the current trajectory means that China will have the robot-operated factories, not the US. What do you anticipate the US will do to obtain goods from those Chinese factories? Especially when AI stands poised to obsolete a lot of the white collar jobs where the US still retai…

'The dollar might be weakened in the future so we must immediately blow it and our entire deeply thought out, researched, and supported policy since the 1940s up to now with no plan all based on a book the President read and hope things work out better than what might have happened sometime in the future (but that there were no signs was happening soon)'.

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

#240

Post by matt-p »

logifail wrote: post #222
pjc50 wrote: post #102

Earlier quoted context omitted.

> 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 lead…

> The UK stepped on its own rake because it was obsessed with tiny, already vanished industries like fishing This isn't just a UK issue: "Fishing is a relatively minor economic activity within the EU. It contributes generally less than 1 per cent to gross national product."[0] and if you look beyond fishing, agricultural policy as a whole is - not sure how to put this politely - not easy to understand: "The CAP is of…

For another "not just the UK" example france has managed to persuade the EU not to buy british weapons out of the extra defence fund unless the UK give France some of it's fishing rights. Can you imagine being Poland and not getting the best anti-tank weaponry, or the best missiles because you want the french to have more fishing rights?

Completely barking mad.

https://www.politico.eu/article/uk-rejects-eu-plan-tie-defen...

Post reply on HN