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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?

#601

Post by appreciatorBus »

hmottestad wrote: post #172
matt-p wrote: post #128

Earlier quoted context omitted.

In theory, you're right, however it ignores some key points; -Some of their costs are in fact linear based on the cost of the item. Inventory cost doubles, perhaps now they have to take out higher interest debt to finance that. Things like insurance would also at least double. Transaction fees (like card fees at about ~2%) and other parts (like returns risk) also increase linearly. -Reduced sales due to increased pri…

I think it depends a lot. I remember working in retail for a summer and saw some of the prices. If you wanted to buy an alarm clock, that was 100% markup, but if you wanted to buy the Garmin GPS then it was 15% markup. I would think that specialised and expensive shoes have less markup than cheaper and more common shoes. But if the cheaper and more common shoes become 50% more expensive then there aren’t really any c…

IMO for the Garmin vs alarm clock example, it's less about costs and more about power & branding.

The retailer & the wholesalers involved all have a reasonable idea about what people will pay for the products in question. The portion of that final consumer price that stays with the retailer is just the result of negotiation.

The retailer can likely buy decent alarm clocks from anyone, so alarm clock makers & wholesalers have no pricing power and the retailer can demand high margins.

But the retailer can only get Garmin from Garmin. If Garmin has done a good job promoting the brand, such that the retailer feels they have no choice but to stock it, they will have to suck it up and accept low margins.

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

#602

Post by potato3732842 »

immibis wrote: post #537
wongarsu wrote: post #412

Earlier quoted context omitted.

Also, continuing overfishing is a terrible long-term strategy. Sure, we will have the boats, fishermen and infrastructure around fishing, but that's of no help if the fish are gone.

Politics isn't about good long-term planning - it's about accountability sinks. This decade: "We're not the ones trying to steal your fishing jobs!" Next decade: "It's not our fault there aren't fish!"

You missed the "you can fix it with money though, and our friends are just the people to give the money to" step that comes after each problem statement.

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

#603

Post by decimalenough »

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 would dismiss this article as pure fantasy.

Why? The article starts from the point where Nike pays $25 per shoe boarded into a container on a boat, where that number covers all expenses until that point. Yes, this includes the shoe workers' wages, but it also has the factory construction and maintenance, manufacturing equipment, the inputs that go into the shoe, transport to get the shoes packed into a container and to the port, etc etc.

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

#604

Post by soared »

hnburnsy wrote: post #345

The thread was kind of hand wavy over the "$24* discount" for Footlocker? From the linked article... >Footlocker’s purchase price (read footnote #3) for every sale of $100 shows up as $66 in their financial reports, and not $50. In plain terms, Footlocker sells its merchandise for a 24% discount on the average. So $100 was never the sale price, just some made up, hoped for number that only appears on the shoe box, an…

I work in marketing for a large number of e-commerce brands across a variety of verticals, including shoes. Brand direct on Nikes website is bugged, but is absolutely dwarfed by sales in brick and mortar retail stores. Think about target/walmart/dicks/big5/etc and then think about just Nike.

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

#605

Post by alvah »

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"

Four times bigger absolutely will not happen; China's demographic disaster is already baked into the cake. Forecasts suggest China's total population will be around 1.5x the USA by 2100, but the average age / working age population will be in the USA's favour.

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

#606

Post by jachee »

myrmidon wrote: post #171
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…

> 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.

> … that they don' even paint for you

Of course. That way they can sell you the official paints.

Fortunately, it seems they’ve dropped that you’re required to use the official paints if you want to enter a sanctioned tournament.

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

#607

Post by doctorpangloss »

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…

Okay… what does this have to do with tariffs or shoes though?

> …China equal to America on a per capital basis

Hmm, what number do you mean will be equal? Income per capita? If the Chinese system paid Americans the same as the American system does, why would Nike operate its sweatshops there? Kind of tautological, no?

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

#608

Post by lmpdev »

eyko wrote: post #258
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.

It's also worth considering that certain industries (fisheries and agriculture for instance) are subsidised. It's in our national interest to maintain production capacity, so profits are the least of our concerns. Both the UK and the EU's agricultural sectors are heavily subsidised mainly for this reason. It's cheaper to import than to produce locally, especially with our environmental standards and targets, but we n…

That’s the biggest thing I took away from the whole Boeing corporate disaster

You need to maintain at least a minimum amount of internal competency in almost all areas

If you completely give away a capability to other countries (in this case, fishing knowledge and labour) it is much harder to bring back than just coughing up the money

Those sectors you let die might not matter right now, but they might matter later. And you might have to scale up fast.

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

#609

Post by hy4000days »

Just the other day, I got a pair of shoes at Walmart for TREE FITTY.

The most comfortable pair of shoes I own are also from Walmart and they cost less than twenty bucks.

How do my $3.50 shoes from Walmart fit into this picture that justifies why Nikes are $100?

This article fails the smell test. Or maybe it’s Nike’s business model that is failing the smell test, I’m unsure.

Also, anybody commenting who claims they “need” a pair of Nikes for their special feet should try being desperately unemployed and borderline homeless for a while.

You don’t “need” anything.

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

#610

Post by doctorpangloss »

overfeed wrote: post #278
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…

> What will be America’s competitive edge in that scenario? A few months ago, I'd have said soft-power and goodwill built over decades with the rest of the western world, which roughly equals China in population size. Instead, I agree that the US is staring down a "managed decline" like the UK, but hopefully not as steep.

…what does this have to do with shoes? A “managed decline?” Brother, the problem with the UK economy is Brexit. That was put in by a plebiscite. It’s not saying much, but at every level, including in the manufacture of shoes, the government has the greatest power to create or destroy wealth.
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