Every day my local, small-town, Republican newspaper has a historic quote on the front page. Today’s got my attention…
I pity the man who wants a coat so cheap that the man or woman who produces the cloth will starve in the process.
-Benjamin Harrison
Date: 08/23/2002 00:00:00 AM
Who is losing money on the $200 shoe?I’ll bet that you’ll find that someone, perhaps even several someones, are making a lot of money on that shoe.Perhaps the losers in that chain need to talk with the winners, or work with someone else.
Date: 08/21/2002 00:00:00 AM
John: There’s only one way a pair of sneakers made from $5 worth of materials and assembled by near-slave labor can lose money at $200 – the management thinks that because the gross profit is so high, they don’t have to be efficient elsewhere. Tne maybe these $10 shoes become $25 after paying the factory managers and bribing the local officials, $50 after shipping by the most convenient rather than the most economical means, $75 after customs, $100 after stateside inspectors have to toss 1/4 of them because of lousy quality control in those Chinese factories. And then maybe Walmart wants at least a 100% markup, and there’s nothing left for your own bloated management.Seriously, I work for a company that manufactures electronics to order (that is, our customers design the products and sell them). We can nowhere near compete with Chinese factories on price – but we beat the hell out of them on quality, on making changes promptly, and most of the time on shuffling production schedules to meet the customers’ changing needs. And when American customers call during business hours, they get a human speaking American, not a Chinese recording… That isn’t enough to overcome the price difference for million-unit orders, but for many smaller equipment manufacturers the time saved and otherwise better service from us is worth far more than it costs them.
Date: 08/21/2002 00:00:00 AM
I can go along with that. But I do not understand some world economics. How the #$%^* can a sneaker made in Mainland China lose money at $200 while a pair of shoes made in the USA or Eu can make money at $80? Is canvas that much more expansive than leather? Or is it gluing the things together rather than sewing? And no, it is not just the swoosh people, it seems to be most of them.