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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?

#491

Post by phkahler »

gnfedhjmm2 wrote: post #324
phkahler wrote: post #314

I've always wondered why the supply chain has exponential price increase at each step. The example given (guessed at) is the factory produces the shoe for $12.5 and sells it to Nike for $25. Nike then sells it to Footlocker for $50 and they then sell to a customer for $100. Everyone expects to mark up their costs by about 100 percent. Why is that the case? Even if we say the markup isn't 100 percent, why is it a perc…

Because then one unit of thing is theoretically one standard deviation from being profitable. So you can have a break even price.

Can you clarify that? It sounds like there may be theory behind it, or are you trolling?

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

#492

Post by zppln »

ninetyninenine wrote: post #260
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…

>We need to anticipate a future where China is equal to America on a per capita basis, This is a nice way to put it. Anticipate a world within your life time where China is the dominant economic, technological, military and cultural super power. Anticipate jealousy, anticipate fear, but know that as Americans who have been top dog for decades there is nothing wrong with not being the best. Additionally anticipate a c…

> cultural super power

My impression is that Chinese culture has very little appeal elsewhere (at least in the West). They can't seem to be able to (or care to) package it in an appealing way. Sure, they're being catered to in films and video games but I see very little organic interest in Chinese culture, especially compared to Japanese or Korean culture.

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

#493

Post by matt-p »

hkt wrote: post #469
matt-p wrote: post #285

Earlier quoted context omitted.

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??)?

Why does everyone assume the commonwealth wants and FTA with us?

Because free trade is typically a good thing that lifts everyone? It's also not "FTA with the UK" it's FTA between everyone, we just happen to be a member. We may be quite low down the list for say Canada as a trading partner and that's fine?

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

#494

Post by jay_kyburz »

gmueckl wrote: post #389
AndrewStephens wrote: post #360

Earlier quoted context omitted.

> Games Workshop brings in > 0.5 billion in revenue (!!) I had no idea that Warhammer was such a huge industry - they must sell almost 600 sets a quarter.

This is either a joke that flies over my head or there are a few zeroes missing. Which is it?

It's a very expensive hobby. My kids are not allowed to look at the models in the window in case they get any ideas.

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

#495

Post by yodsanklai »

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…

> We need to anticipate a future where China is equal to America on a per capita basis, but four times bigger.

Is it even possible in terms of resources? there are limits to growth and it may not be feasible for 1.5 billions people to consume and pollute as much as an average American.

Also are the US willing to lose their supremacy peacefully?

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

#496

Post by slt2021 »

strich wrote: post #488
slt2021 wrote: post #457

Earlier quoted context omitted.

due to immigration, USA draws talent from global population of 8.2 billion, so the top limit of people with IQ>140 that can live in USA should be drawn from 8.2 billion, not 340 mln

Not anymore it shouldn't.

why? has any immigration law been changed?

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

#497

Post by blacklion »

AndrewStephens wrote: post #360
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.

> Games Workshop brings in > 0.5 billion in revenue (!!) I had no idea that Warhammer was such a huge industry - they must sell almost 600 sets a quarter.

I've read, that now GW have more than 50% of revenue from licensing IP, not selling books & plastic.

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

#498

Post by dcow »

I wish the discussion included the margins the fashion industry makes. In the labor sector, 10%-20% margin is respectable. But in the fashion and consumer goods sector at least 30% margins are expected. 80% margins are normal for “luxury” goods, which I’m sure is the bracket Nike falls into. I wish margins were included in the thread. It’s only true that everything increases in cost if you also have to keep the same margins.

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

#499

Post by pfannkuchen »

ty6853 wrote: post #131
pfannkuchen wrote: post #105

Earlier quoted context omitted.

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 under…

Take this to the logic absurdity, you have a car you previously sold for $2 for $1 COGS. Tomorrow COGS is $1M for the car. Could you sell it for $1M+1? No you would lose your ass because your line of credit and investments would not be able to be supported by the returns, in fact if this is your only option you would probably stop making cars altogether and invest in another business and sell your assembly line, even…

Okay I think I understand, thanks for explaining.

So basically the money a business uses to produce the next tranche of goods (so to speak) normally comes not from income from sales of the last tranche, but rather from external funding sources such as loans or capital injection from investors?

Is that really so common as to be universal and affect investor behavior like you suggest? Like for certain types of business, and especially for early stage businesses, I do expect this to be the case. But does it apply to the market broadly? Scary if so, since it seems like a destabilizing force.

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

#500

Post by FredPret »

le-mark wrote: post #448

Clearly shoes and textiles in general are extremely difficult to automate, but you only have to build one shoe building robot, and copy it. Why hasn’t this been done? Expecting a “too hard” answer honestly, but is it really?

Manufacturing machines are hard to invent, and harder to keep running right, and even harder to network together into an effective factory. You need skilled operators, technicians, and engineers to design and run a factory.

You also need to put down a big whack of capital upfront and will see a return years down the line, hopefully.

With low enough wages, it could easily be financially better to rent a big building in the third world and staff it with actual people.

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