Welcome to Sunday Snacks, folks. We’re the giving you terrible jokes but mildly better analysis to help you stay briefed throughout the week.

NOTES: Thank you to readers to submitted feedback last week. We’d definitely help you up on the door.

It’s all about Supply Chains this week. Don’t worry it’s stories you’ll like!

Here’s the (slightly larger) run-down for this week:

Apple peels back on Vision Pro Plans

Apple was in the news this week.

• Apple's Vision Pro headset, a mixed-reality device, is facing production challenges and has scaled back its ambitions.

• Apple's initial assembler, Luxshare, is expected to produce fewer than 400,000 units in 2024.

• This is a significant reduction from the earlier target of 1 million units in the first year.

How to snap back when someone starts regurgitating thoughtless ‘bearish on Apple’ opinions:

There’s a mixture of 3 things happening here. We’re not sure about this but we’re gonna think more about what this means.

1. This could actually be a true thing. It’s a sophisticated device, so material sourcing/assembly has its own novel challenges

2. Apple probably saw forward-looking demand and decided to raise production issues as a way to peel back on their initial sales guidance.

3. This could be a ploy to create more product scarcity/hype for when this thing hits the shelves.

Shein: The Nikola Jokic of Fast Fashion

Shein, your/your wife’s favorite place to have their dreams broken, is coming after Amazon.

• Shein, a Chinese fast-fashion retailer, is transitioning from selling its own branded apparel to becoming a marketplace platform for third-party sellers.

• The company has a large and loyal following, with a strong presence on social media platforms like TikTok and Instagram.

• The shift towards a marketplace aligns with Shein's localization strategy, as the company expands its global presence and builds supply chain infrastructure outside of China.

What to say the next time you want to bore your SO*:

When we think of fast fashion, we think of H&M, Zara, etc., right? You see something on the runway, and you’ll see it in one of those stores 3-6 months later. That’s usually the way it works.

Now imagine a company that knew almost instantly whether something was a sartorial hit or miss, but also had an endless supply of factories ready to create and ship all the hits. THAT’S Shein. 

Shein isn’t any different than a lot of Chinese retailers, who, over the last decade have started to sell directly to internet native customers. It’s just that it does it better and faster than anyone else.

Here’s how it happened:

1. Amazon marketplace has been a boon to Chinese retailer/producers.

2. It has informed them of what Americans like, sartorially speaking

3. Amazon and Chinese sellers soured on each other

4. Shein came in and recruited said producers

5. Shein’s becomes a giant co. with a slick social media presence, and absurdly rock bottom prices .

Bottom Line: Shein’s specific knowledge of apparel supply chain + logistics and marketing has been its magic potion to rise to the top. The company has enough leverage on both the supply + demand side where it makes sense to go vertical and compete directly with Amazon.

*This actually happened. Ahmed’s wife rolled her eyes and walked away like 5 seconds after.

Thoughts: Global Supply Chains Prepare to be Rick-Roiled

As the guys who were "never gonna give us up" are ready to give up on negotiations as UPS corporate apparently walked away from the table on the International Brotherhood of Teamsters during collective bargaining negotiations.

Why are we here: 

UPS, the king of last-mile and local delivery; owning a whopping 37% of market share isn't keen to cede any ground to runner-up FedEx in a world where less than 1/5 of parcel & package local service is fulfilled by the actual U.S. Postal Service. As such, they want to keep costs low and are not jazzed about the IBT demanding fancy things like higher wages in line with inflation and some protections like not forcing overtime.

UPS clearly think americans are economically desperate enough that a strike of its 350,000 union member employees will be quickly overcome by hiring scabs out of the strong labor market.

While it's true that the US economy has been net creating jobs for a little bit now (30 straight months), a lot of this growth has been uneven across industries and labor value strata (fancy way of saying across pay bands). One of these growth sectors has been Shipping/Logistics, but many of the jobs added have been lower paying (more or less in line with what UPS is currently offering employees).

What would happen in a strike?

Bad things, like whatever happens when 35% of a major country's packages & shipping orders don't arrive, and then whatever happens when the pile-up the next day is realized and another 35% of a country's packages get stuck in the warehouse. We don't even want to think about it, seriously. We had no idea how big UPS' market share is and we're kind of shitting ourselves right now about this.

Shipping networks and supply chains are super fragile, we learned this during covid disruptions, more fragile than we'd like to admit.

Again, none of this is investment advice. 

What AI made this week

Have a great week!

Ahmed and Peter