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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?

#581

Post by throwup238 »

pfannkuchen wrote: post #499
ty6853 wrote: post #131

Earlier quoted context omitted.

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…

It tends to affect larger companies even more because their cash flow is heavily buffered by lines of credit on both sides, their vendors and clients. Their customers might pay them on net 30 or even net 90 but many costs - like salaries for the people to service those contracts - need to be paid on shorter time horizons.

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

#582

Post by emrah »

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…

China got to where it is by taking loooots of inspiration from American tech. And it's not their fault US doesn't like the Chinese gov yet won't stop using their facilities to manufacture because they are cheaper..

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

#583

Post by JackYoustra »

ForOldHack wrote: post #425

"I encourage you to note assume that every Asian worker is a slave." I do NOTE, that I was on Korea for 18 months, and saw over 20 factories, and knew a few people that worked there. They were making 1/10 of the minimum wage in America at the time, $0.75 vs $7.50, Today they are making $6.94, so I would assume that They are making few shoes in Korea. "While it's difficult to pinpoint exactly which country pays the ab…

I mean, unless you think it's forced labor it's better than the alternative

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

#584

Post by mercutio2 »

throwaway48476 wrote: post #372
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…

The average Brit is now poorer than the average Pole. Dominating finance hasn't worked out well for the citizens of the UK.

Dominating finance + Brexit.

Brexit worked out fairly badly for rich folks. I'm not sure how well it worked for the folks who were voting for it, but it's possible "take the rich folks down a few notches" even if it lowers the median income, if you yourself don't earn the median income, is still seen as worth it.

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

#585

Post by sien »

xivzgrev wrote: post #557
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…

Competitive edge is new innovation and I don’t see that changing anytime soon. The rules and culture favor it in the US, more so than anywhere else on earth. China didn’t invent the iPhone or chat gpt. But they excel at optimizing.

DJI is the premier drone company in the world.

Also in places where Chinese electric cars are not being blocked they are really taking off. In 20 years for billions of people the most common car will be a Chinese one.

China is able to build nuclear reactors while the US is floundering.

The Chinese may well be the first to produce electricity from fusion.

People come back from Shenzhen now to the US and say that the US now feels less advanced.

The US certainly leads in some areas. But not longer all areas and things are moving toward China.

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

#586

Post by bdangubic »

xivzgrev wrote: post #557
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…

Competitive edge is new innovation and I don’t see that changing anytime soon. The rules and culture favor it in the US, more so than anywhere else on earth. China didn’t invent the iPhone or chat gpt. But they excel at optimizing.

This is old old China you are describing… The new China is not merely optimizing but both innovating and making superior… For people that have the priviledge to visit China, the first thing you’d notice is that they are on another level from America, in every possible way. Going to Beijing and then going to any city is America is like going to NYC and then going to Toledo

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

#589

Post by nearbuy »

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…

This isn't what it says in the thread. It's saying Nike and retailers need to maintain their markup rate on their unit cost.

> And if Footlocker purchases Nike shoes for $75, then they retail them for $150. Everyone needs to fixed percentages to avoid losses.

The problem with your breakdown is you're mixing unit costs and net profit in a way that doesn't work. For example, say after increasing the price in accordance with your summary, the volume of sales halved (just to pick an easy number). Then the $17 marked as "Footlocker expenses" increases, likely to around $34, and Footlocker's profit becomes -$10. The absolute expenses haven't changed. They're still paying the same amount for their employees and storefronts. But with half as many shoes sold, the expense per shoe is doubled.

It's not just sales volume that affects the $17. Other costs like credit card fees or shrink scale with the unit cost as well.

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

#590

Post by [deleted] »

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…

[deleted]
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