Be careful of painting with too broad a brush. Different industries operate in vastly different ways to very different outcomes in the long term.
Compare http://en.wikipedia.org/wiki/Natural_monopoly to http://en.wikipedia.org/wiki/Perfect_competition
That's beautifully conceived, but you conveniently ruled out an option that sly bootmakers could get their hands on a Chinese dictionary and instruct these cheap Chinese suppliers (rather than the supplier next door) on what type of nails exactly they would like to have made for them ;)
The key thing here is that if I buy boots cheaper by 1/4 (thanks to partial outsourcing), I will spend the 1/4 I saved by going to a barber. Or a local restaurant. Or by buying doughnuts at a local bakery. So - speaking of economy to which there's more than meets the eye - these are local suppliers too, indirectly benefiting from the fact that local shoemaker imported nails.
Also worth pointing out that in a specialized economy, most companies cooperate instead of competing with each other. The bootmakers likely need nails specifically designed for their boots so buying generic ones from China isn't an option. Instead they need to source a local supplier and tell them how the nails for their boots models need to be made. They enter a symbiotic relationship in which both benefit.
Liberals like to see capitalism as a marathon where the runners compete with each other and the best ones win. But the system works more like the cells in a human body. Companies need to specialize and work together to be successful.