$40 can buy a lot of things.

• 8.9 gallons of gas.
• 9 gallons of milk.
• 4.1 movie tickets

But as I learned last night, it can only buy one fitted baseball cap.

Last night, went to the soccer game of NY vs Barcelona. I never watch sports, but Spotify gave me some tickets, so I went and had a good time.

Someone working there gave us some free stuff, one being a fitted baseball cap.

I don’t own any hats, because I’m too fond of my hair for that. Taking the hat, I looked at it a few minutes later, noticing it still had the tag on it and cost $40 per hat.

Was sort of amazed that’s what the stadium was charging for fitted hats, with me guessing something that simple would be a $5-10 item.

Decided to search this and found fitted baseball hats, which I’d guess only cost $1 to make selling for $40 at stadiums is pretty standard.

Thought discussing this price would be worthy of a post, so here’s what I got.

Looking into and first thing I learned was the US actually has baseball hat tariffs.

The United States currently has a 14.7% tariff on hats imported into the US, as a product of the Trump administration, early in his term.

The original tariff was 10%, which Trump announced would rise to 25% in 2018 and never went into full effect, but did hit almost 15%.

This tariff applies to all headwear, which is actually a huge piece of trade for the US, totaling 200 billion yearly.

This tariff has hit hat prices fairly hard, where stadiums were selling fitted hats for $30 on average in the US and have since raised to $40 as the new norm, for an over 30% increase.

The next thing I looked at is what it actually costs to make a fitted fat.

Looked that up and found in the early 2000s, the costs of making a hat in the US were $1.10 to $2.80, with that rising now to a point that the remaining hat manufacturers will charge $4.

Due to those high costs, the largest manufacturers of baseball hats are all in Vietnam, which falls partly into the 43 billion dollar Vietnamese textile market.

Vietnam is vastly cheaper, where baseball hats can cost around $0.50 to make.

There is also some shipping cost, but that seems low, where sources I found online say $73 is the average cost per pallet, meaning a baseball hat should only have about a dime added to in costs from shipping.

I looked at that and thought the margins on hats were insane, but it looks like some added costs happen with manufacturing in certain cases.

The fabrics needed to make hats fitting are more expensive and the manufacturing process is harder.

Some hats have sewed on logos with special materials.

This makes it so the costs can even in Vietnam hit $4,00, which factoring in shipping, hats made poorly that need to be thrown away and tariffs can cause an issue.

The third thing I wanted to look at were hats themselves, with how the industry works.

The largest baseball cap company is New Era, which is over 100 years old and based in Buffalo, NY.

They have over 500 licenses, which the biggest one is the MLB.

For the most part, I guessed that MLB and other sports leagues for products such as hats would just manufacture their own.

I was wrong and found they license to New Era, which has a fixed fee for using the MLB logo and any other logo, only for the leagues and stadiums to buy the hats from them.

That process is a little confusing, where the leagues license the logos to New Era, New Era pays them to make the hats and ends up selling them to the leagues anyway.

It’s a little inefficient, but a factor for the prices.

That’s part of it and the biggest factor is this.

Fashion is expensive.

Sports hats, while just being generic products made in Vietnam are a part of fashion.

Looking at baseball hats, the sports leagues were on the cheap side, selling for an average of $40 per hat.

Many rappers, musicians and individual athletes had licensed hats, which sold for closer to the $60 range, with many breaking $100.

It’s why businesses like Lids are open, having 1,100 locations and making 800 million a year.

It feels really silly to see a hat sell for $40, but similar to jeans, shirts, shoes and more, fashion just has insane margins.