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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?

#731
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…

Be careful extrapolating based on China's current population and demographics. Too much of our armchair assessments of China's velocity is based on their meteoric rise on the backs of a historically large working-age population—a population that is now rapidly aging out of the workforce with nothing to replace it thanks to the one child policy. The US's demographics aren't stellar, but they're a lot better off than m…

India has a bigger population but they haven't risen anywhere near the way China has.

China's rise was due to smart planning and investment in their people and infrastructure. The country went from peasant farmers to the manufacturing hub of the world in a generation. Now they're in the process of becoming a major hub of knowledge workers while keeping a strong manufacturing backbone.

And one thing I rarely see mentioned is that the Chinese government keeps its currency artificially devalued in order to sell their products cheaply and undercut competition. Looking at their economy purely on a GDP basis really underestimates how big their economy is. GDP by PPP is more accurate. If China ever decides to stop loosely pegging its currency and let the value naturally rise, their GDP will very likely swell, since GDP is measured in US dollars.

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

#732

Earlier quoted context omitted.

Not really. The opposite. The current market is centralized a lot more than people want to see or admit. I had trust in the free market for a long time but it has not really materialized the best results. As can be seen by the current state of affairs. Everyone fighting over who gets to have money and production is not freedom, it's a war without guns. Just to make this clear, a truly free market would be desirable b…

> The current market is centralized a lot more than people want to see or admit. You completely misread their comment. They said central planning , as in, a command economy.

Considering I talked about a truly free market, central planning then seems to be a weird reaction. Why would that be related? It's not like I suggested a Chinese system, I advocated for one which is free from monopoly and focusses on local production and diversity for sourcing goods.

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

#733
Damn! I tried to answer the question without looking at the thread and arrived at a unit cost of 28 % of the retail price, after deducting reasonable guesses at VAT, store margin, shipping, etc. Fairly close to the quoted 25 %.

Fermi estimation is awesome and if you're one of today's lucky 10,000 who haven't heard of it, this is your day!

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

#734
post #570

Earlier quoted context omitted.

Lego is pure IP (both from LEGO itself, and then e.g. Disney or whoever is behind the theme of a given set). If you get sets designed in China and made at the same factories that make Lego bricks, they're like 1/3 the cost. If you get sets designed in not-China but obviously ripped off ("Star World" sets that are 1:1 copies of Star Wars legos), also in the same factories, it's like 1/10 the cost. The manufacturing is…

False. Lego is some of the most precise injection molding in the world. The tolerances are insane and they nail them every time. Compare with offbrand building blocks and you'll feel the difference. Micromolding is very hard, and Lego is the best at it.

Exactly. I bought 3 or 4 China Lego clones to try and the parts were slightly different in size and in color. Some blocks way too big, so building was not good experience. For original Lego you don’t need sanding paper on the table.

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

#735
post #426

Earlier quoted context omitted.

China could not only be ‘equal’ but ‘better’ than the USA - we should get used to the idea. China has an average IQ of 104 out of 1.4 billion people, while the USA has an IQ of 97. In purely statistical terms, this means that the USA has around 700,000 people with an IQ >= 140. China has 11,480,000 people with this IQ. This human capital will make the difference.

None of this is meaningful. IQ as national population-level statistic is folkloric. China may well have a human capital advantage over the US; that's what you'd expect from a country with over 3x as many people. But it has nothing to do with biological differences between Americans and Chinese people.

Nobody mentionned biology. It is policy and culture.

In the USA it is less fashionable and more frowned upon every year to show intelligent traits. And it has been the case for the last 20 years.

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

#736

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…

Nike's margin is brand.

Footlocker probably doesn't have much of a margin, the price they charge is due more to high labor and real estate costs in the US which are being passed on.

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

#737

Earlier quoted context omitted.

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

It's priced in a similar way to Lego.

Yeah, and way much too! I wanted this so bad for my kid but it’s breathtakingly expensive (while still being quite an underwhelming set).

https://www.lego.com/nl-nl/product/lego-education-spike-prim...

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

#738

Earlier quoted context omitted.

None of this is meaningful. IQ as national population-level statistic is folkloric. China may well have a human capital advantage over the US; that's what you'd expect from a country with over 3x as many people. But it has nothing to do with biological differences between Americans and Chinese people.

Nobody mentionned biology. It is policy and culture. In the USA it is less fashionable and more frowned upon every year to show intelligent traits. And it has been the case for the last 20 years.

Maybe; I have no opinion about that. But China's human capital advantage in the coming century seems pretty clear just from the numbers.

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

#739
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…

> Today, China is competitive with or ahead of America in key technology areas, including nuclear power, AI, EVs, and batteries.

I can’t tell if you’re brainwashed by propaganda or just spreading propaganda.

China is great at making things flashy. But the quality things like EVs is low. The battery quality is not good. The promise of long range cars is often 30% of the promise. Cars leaking. Rusting like American made cars.

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

#740

Earlier quoted context omitted.

This is a bit harsh: the USA didn't devalue labor in general, just manufacturing. They hired software engineers from all over the world, along with a lot of higher value engineering and product development jobs. The error the USA made was in pushing the workforce up the value chain faster than everyone could handle, and a lot of Americans got left behind. China is moving up the value chain also, they are being forced…

Did they hire those software engineers along with their unions? Not quite. It's all about labor and getting rid of the class that used to (and could have) threatened the elites.

SE will one day realize they are as screwed as the average worker and unionize in some way. The endless money pits are not for every SE, even today the majority does not work for the creme-de-creme of well paying companies. While specialists and smooth talkers might profit from the current model, as always is the case, most won't.
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