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

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689 points taubek | 1 comments | 09 Apr 25 12:58 UTC | HN request time: 0.202s | source
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hx8 ◴[09 Apr 25 16:16 UTC] No.43633780[source]▶
> 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 go up? The costs of handling the shoes, retail space, advertising, and labor are all fixed.

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1. slt2021 ◴[10 Apr 25 03:05 UTC] No.43640232[source]▶
more expensive shoes will lead to longer lead times to sell inventory, due to downward slope of the Demand curve (less demand for more expensive shoes).

If you sell $75 shoes, you can sell 1000 units/mo, but if your shoes are $100 you can only sell 700/mo and it will take 1.5 months to sell 1000 units.

This effectively increases fixed overheads per pair of shoes and decreases net margin per pair, given constant demand