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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?

#281

Post by ajb »

Symbiote wrote: post #261
ajb wrote: post #233

Earlier quoted context omitted.

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 warham…

A precision injection moulding factory can (I assume) relatively quickly start producing other plastic parts for military use. Post-Brexit, there's now increased incentive for Games Workshop to build their next factory in the EU. (Games Workshop is one company, but this applies to every manufacturing company in the UK.)

Fair. I'm not a fan of Brexit and I think it's been both driven and implemented more listening to nostalgia than strategy.

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

#282

Post by [deleted] »

matt-p wrote: post #240
logifail wrote: post #222

Earlier quoted context omitted.

> 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-d…

[deleted]

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

#283

Post by mkipper »

josefresco wrote: post #237
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?

There are _some_ differences in quality, but I think they're pretty minor.

I recently visited the Philippines and a friend bought some knockoff Crocs at a market. The little rivet thing holding the strap to the shoe had the logo printed right on the exposed plastic, and after a few days, the logo was mostly scratched off. But my wife's Crocs that she bought a decade ago still look fine because there's some sort of sealant on top of the logo.

Is that worth an 800% markup? Probably not. But the knockoffs do cut some corners that the genuine articles don't.

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

#284

Post by losvedir »

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]

I actually think this kind of supports the point you're responding to. HN used to have a battle cry about startups where "the idea doesn't matter, it's all in the execution" (mostly because we're tech-ies, and not those business folks coming up with the silly ideas).

Well, to some extent that's the case with manufacturing. You're bemoaning the loss of IP, which is catastrophic when that's all you have and your wealth is built on a gentleman's game of words and paper.

China, meanwhile, has built out factories, a knowledgeable workforce, and an extensive supply network. Back to startup terminology, there's a "network effect" in manufacturing of all the little parts that make up bigger things. You can drive around town and try out different parts, and make an invention here or there and improve things incrementally. There used to be a thriving ecosystem around the big U.S. domestic car manufacturers, not just for the cars themselves, but all the thousands of parts that go into them.

In other words, like many older hackers who grew up in the "information just wants to be free, man" world that spawned open source, the dig that China is "stealing IP" doesn't really hit me that hard. I'm impressed that they've gone to the next step of actually using it to make physical stuff, and I wish we did that more.

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

#285

Post by matt-p »

Symbiote wrote: post #261
ajb wrote: post #233

Earlier quoted context omitted.

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 warham…

A precision injection moulding factory can (I assume) relatively quickly start producing other plastic parts for military use. Post-Brexit, there's now increased incentive for Games Workshop to build their next factory in the EU. (Games Workshop is one company, but this applies to every manufacturing company in the UK.)

Brexit is mad, driven by nostalgia etc.

However, if we got a free trade agreement with the US would the inverse be true, EU companies are better off moving to the UK due to brexit? What about just a FTA with all commonwealth countries (why haven't we done this??)?

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

#286

Post by _diyar »

SoftTalker wrote: post #92
Cerium wrote: post #41

Earlier quoted context omitted.

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?

Because tariffs are calculated based on the value of the good at the time of import, while sales-taxes would be calculated at the end.

The article explains the tariff scenario. In the tax scenario, Nike can operate like in the pre-tariff world, while the retailer would have to charge the tax.

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

#287

Post by tim333 »

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 UK may not have dominated finance for a while but we had headlines like:

"London Beats New York as the World’s Leading Financial Center in the Latest Ranking"

in 2015 before the glory that is Brexit.

https://www.bloomberg.com/news/articles/2015-09-28/london-be...

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

#289

Post by bboygravity »

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…

Except that that future of a big powerful China doesn't exist. Their birth-rate is 1.

Game-over.

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

#290

Post by tim333 »

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…

>why do they need to claim $75 profit/shoe in their costs per shoe go up?

A lot of the costs come from bidding against other retailers for employees and retail space. If you don't make as much as the rival retailer they'll outbid you.

You can sometimes get around that by buying direct from the internet.

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