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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: 0s | 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. ajsnigrutin ◴[10 Apr 25 11:03 UTC] No.43642701[source]▶
> 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.

Some extra costs are real and linear to their "factory" price (returns, insurance, stolen stuff, less people buying less shoes, so they need higher margins to survive, etc.).

On the other hand... they can raise their prices today by $whatever_tarrif_trump_mentioned, and blame trump for the price hike and pocket the extra profit.