Comment by JasonADrury
11 days ago
>What happens if truly nobody wants those clothes
In theory companies would eventually be forced to produce less items nobody wants, although this is just an additional incentive in that natural process.
11 days ago
>What happens if truly nobody wants those clothes
In theory companies would eventually be forced to produce less items nobody wants, although this is just an additional incentive in that natural process.
That doesn't really make sense, losing your whole investment is already a strong incentive to not produce something you can't sell.
Clothing has a huge profit margin (when manufactured overseas) especially at the higher end (for brands which do not invest in local production, which is most, because it is also hard to beat Chinese quality). It's better for these brands to over-produce on some items and lose the low-cost inventory, than to under-produce and not meet market demand, to not offer a range of sizes and varieties to meet individual taste, and not achieve wide distribution that's necessary to grow market demand. That's why regulation is needed here.
I get he economics, but I don’t think it follows that it’s a problem governments need to involve themselves in.
6 replies →
Assume the legislation is trying to reduce a real problem. Why does that problem exist if that incentive is actually really strong in practice?
I assume it's not actually a really strong incentive in context.
> Assume the legislation is trying to reduce a real problem
Why assume that? Could you not imagine that legislation is often meant to signal values to voters as much or more than it is intended to solve real problems.
2 replies →
A factory might have a minimum order quantity of 10000 units for a product. The products cost $1 landed.
You know you can sell 4000 of those products for a total of $15k.
This might become a bad deal if dealing with the 6000 extra units costs you money.
maybe this will force factories to change their process. with manufacturing getting cheaper, smaller batches become affordable. at the extreme we can now print books on demand, and improved 3D printing allows one-off items in many more areas. that's the trend we need to push. to get away from wasteful mass production.
4 replies →
You can produce so little people take anything you give them - like it was in the Soviet union.
Overproducing is often cheaper than losing sales because of the fixed costs of producing a batch and the externalities of destroying your inventory not being priced in. Some brands also find it more interesting to destroy stocks than reduce prices because it protects their brand values. Well, now, that's illegal.
I would think the incentives to produce things no one wants would already be pretty low.
Supplier MOQs can create significant incentives to overproduce. For example, you get 9000 things someone wants and 1000 that no-one wants.
This can be profitable for the customer, if they can't just easily get rid of those 1000 they can't sell, it's presumably less profitable.
Presumably the split between things people want and do not want is not known a priori. It seems the EU is trying to legislate into an existence a solution to an unsolvable equation.
3 replies →
[dead]