Rivoli Questions Ch.
1. Explain what the US’s
new comparative advantage is in the T-shirt market. Use the terms supply,
demand and cast-off in your explanation. The US
is rich and we produce the majority of the world's cast-off garments. The
supply has exceeded domestic demand and so we are able to lead the world in
exports of used clothing.
2. Explain how Figure 10.1 demonstrates that
the US has
become a major exporter in the used clothing market. The graph shows
that exports of used clothing have increased by more than 200%
during the past 15 years.
3. How does trade
for clothing recyclers’ differ from that of retailers and exporters of new
clothing? Businesses that deal in recycled
clothing do not receive government support/protection. Nor do their
exports/imports face barriers like tariffs and/or quotas. They compete in
a free market.
4. What does Rivoli mean by
“snowflake”? Rivoli uses the term
snowflake to refer to the lack of uniformity in the recycled clothing
market. The commodity, used clothing, varies greatly from almost new
sweaters to t-shirts that
can only be used as rags. Like snowflakes, every piece is unique.
Success in the market depends on sellers' skill in identifying single items
that are valuable to particular buyers.
And how is the recycled
clothing market an industry for the little guy” instead of a large corporation?
Large corporations are designed to mass produce items for a mass of
consumers, not to sift through snow flakes and then sell them to individual
5. How is the Stubin
business “both the rule and the exception” of the recycled clothing
business? The Stubin business is the
rule in that it is a small family run business. It is exceptional because
it has stayed in business so long.
6. Explain how geography influences
the prices that the Stubins
pay for recycled clothing. Prices for cast-offs from wealthy neighborhoods
are high. Seasonal differences also influence prices paid for
cast-offs. Winter cast-offs = low prices. Summer cast-offs or
cast-offs from warm climates = higher prices.
7. How has the recycled
clothing market changed during the past 30 years? Use the terms sorting,
prices and mining in your answer. Cast-offs used to be sorted by
type of future use: clothing, rags, fiber. Each type was profitable.
Increasing competition and supply have lowered prices. Now cast-offs are
mined, which means that sorters currently
search for cast-offs that will sell in an
upscale market. Mining requires much more knowledge about markets
than simple sorting.
8. What is the role of
“vintage” clothing in the mining of recycled clothes? "Vintage"
clothing is hard to define, but it refers to
used clothes that buyers perceive as
"hip", "cool", "tight".... Buyers pay high
prices for vintage items. Clothes recyclers who can spot vintage
snowflakes and identify special customers for those snowflakes profit the most.
9. Describe Japan’s
role in the recycled clothing market. Japan
is the largest market for US cast-offs.
However, this does not mean that the largest volume of cast-offs is exported to
means the highest value cast-offs are exported
"Hip, young Japanese" place a high value on US
cast-offs with brand names like Levi's or Nike or Disney images.
10. What skills must Sunny Stubin possess
to succeed in this market? Sunny has to
know her customers to know what items are of
high value to them.
11. Where do most of the US
recycled clothing exports go? How is this
odd? Most US cast-offs are exported to Africa.
This is odd because it is a trade relationship in which one of the world's wealthiest
countries is exporting a commodity to the world's poorest region.
12. Explain how African customers are “king” in the
recycled clothing market. Use the term supply in your answer. Because
of the large supply of US
recycled clothing and the large number of companies who export it to Africa,
African buyers can be choosy about what they buy and from whom, despite their
13. Describe the way that recycled clothing is packaged
for transport to Africa. How does reflect that
exporters are attuned to their African customers’ demands? Specific
types of clean clothing are baled according to African buyers demands: a bale
(500-1000 lbs.) of khakis, a bale of t-shirts, a bale of socks...
14. What is the
value of a used t-shirt in Africa? $.20-$.25 How does that
compare to the value of the raw cotton and new t-shirt sold by Sherry
Manufacturing? Raw cotton = $.40-$.50; new t-shirt = ~$5.99
15. Where is the
“vintage” clothing sold? Europe, North
16. Where are the winter coats sold? Eastern
17. Where is the old
wool sold? Italy
18. Where are cotton sweaters sold? Pakistan