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It depends on the industry but margins in manufacturing are often enormous. I once worked in a factory making action figures. We could make a few dozen for unde
by grizzles 7y ago
It depends on the industry but margins in manufacturing are often enormous. I once worked in a factory making action figures. We could make a few dozen for under a penny in energy and material costs. Those sold for ~$19.99 each.
It turns out that all the cost is in marketing and distribution. And for asian manufacturers the internet era has decreased those costs a ton. They can outsource them to eg. western youtube price arbitragers and focus completely on volume to maximize their government subsidy.
- toasterlovin 7y agoBut the action figure factory was not Mattel, right? They were a contract manufacturer that companies like Mattel source from. If they try and reduce their prices to Mattel by 10-25% to counteract tariffs then it’s going to hurt bad, because they don’t have 25% margins. They have <10% margins.