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Making the Switch: Why You Should Buy American-Made Products

American-Made Products

More and more consumers are voting with their wallets in favor of American-made goods. Noting that “Made in the USA” is making a comeback, NeMAC (the State of Nebraska’s Manufacturing Advisory Council) points out that some of the nation’s biggest manufacturers are bringing jobs back to U.S. soil in order to keep pace with consumer demand for 100 percent American-made products.

In a Consumer Reports National Research Center Survey, 78 percent of Americans said they would rather buy a U.S.-made product. Some of the reasons cited for renewed enthusiasm for home grown goods and services include consumer trust, economic concerns and increased understanding of the importance of a thriving manufacturing sector here at home:

  1. Consumer Trust: Buyers have more confidence that goods made in the USA adhere to high safety and production standards, vs. goods made outside the country.
  2. Economic Concerns: Americans are increasingly aware of the trade deficit and dependence on foreign markets.
  3. Social Concerns: More and more Americans are aware (and disapprove) of the use of child labor and exploitive working conditions that exist in some countries. In the survey cited above, 60 percent cited concern about the use of child labor or cheap labor overseas as the reason they would be willing to pay up to 10 percent more for American-made products (and more than one in four would be willing to pay 25 percent more).
  4. Health of the Manufacturing Sector: Educated consumers realize that not only does the presence of a thriving U.S. manufacturing sector decrease foreign dependence and the trade deficit, but manufacturing businesses improve the health in the national and local economies with job creation, community reinvestments and many other direct and indirect benefits.

Will Transitioning to 100% American-Made Products Cost More?

Although transitioning any major area of your business comes along with inherent expenses, there are many experts who suggest that the idea that American-made products cost more to make is, in fact, a myth.

A Bloomberg article titled China vs. the U.S.: It’s Just as Cheap to Make Goods in the USA explains that although Americans believe U.S. companies can’t compete on price against foreign-made goods, this is simply not the case. When considering total labor costs, energy expenses, productivity growth and currency exchange rates, Brazil actually tops the list of highest-cost manufacturing nations, and the cost of goods made in China is virtually even with that of the U.S.

With that said, as you consider the prospect of transitioning to 100% American-made products, you should keep in mind not only current conditions but future projections. The Bloomberg article cited above closes with an admonition for manufacturers to think very carefully about the landscape over the next 25 years. With more manufacturers choosing to produce their goods on U.S. soil, the cost of going completely American-made could easily be the same (or even lower) than opting for foreign-made products, especially over the long term.

Kabbage retail business loans could give you the working capital you need to replace foreign-made goods with products made in the USA. Our retail business loans are fast, flexible and give you the ability to quickly execute on key strategic initiatives like this one.

How to Know If Products Are 100% American-Made

Just because a product’s label has an American flag or reference to the United States on it, does not necessarily mean that a product is 100% American-made. As we reported previously, only 75 percent of a product’s inputs have to be USA-sourced to merit “Made in the USA” labeling or advertising. In reality, the line is blurry. Laura Koss, FTC senior attorney says that the key factor in determining whether a “Made in the USA” label is deceptive is simply whether it’s “likely to mislead a reasonable consumer.”

For instance, iPad Mini packaging says, “Designed by Apple in California, Assembled in China.” This is an acceptable representation, according to FTC guidelines; however, if the packaging merely indicated that it was designed in the U.S. without reference to where parts were manufactured or assembled, it could be considered deceptive to a reasonable consumer. The bottom line is that you may need to dig deeper than a product’s label or marketing to find out whether goods are truly and completely made within the U.S. Some products are assembled within the U.S. with parts made overseas (and vice versa).

Where to Buy American-Made Products

Below we have included links to directories and articles where you can find manufacturers, distributors and other sellers who provide 100% American-made products and services:

  • Made in America B2B

The Made in America B2B (business to business) Directory is a site where retailers can source products that are made in the USA. These are organizations that wholesale goods to brick-and-mortar and ecommerce retailers for sale to consumers in the U.S. (or anywhere in the world). Product inventors and developers can also find manufacturers on this site to work with to produce goods that are 100% manufactured in the U.S.

  • Consumer Reports

Consumer Reports.org provides a list of goods which are still made in the USA.

  • Made in USA Forever

MadeInUSAForever.com has a list of American-made products. Todd Lipscomb, president and founder, notes that while “the big chain stores have made it hard to find American-made products, our goal is to make it fun and easy.” Though geared for consumers, this site can help online and brick-and-mortar store retailers discover product lines that would be appropriate for their stores. You’ll also find a link to the top 10 reasons to buy 100% American-made products right on their homepage which can help you with marketing and ad campaigns.

  • Americans Working

Americansworking.com offers consumers a reference for finding products made in the USA. Companies don’t have to pay to be listed on their site and are non-political. They are not “anti-anyone” but simply believe that buying American-made products benefits the nation’s economy and workers. Especially helpful for retailers who want to work with local manufacturers, this site even includes a breakdown of companies whose products are 100% American-made by state.

 

Making the transition to products that are made in the USA could be good for your business, helping to set it apart from the competition and giving buyers another reason to choose to buy from you instead of another company. As you think through the value of making this change, be sure to consider not only the short-term costs but also the long-term outlook to make sure this is a good decision for your business. If you do decide to make the change, don’t forget to make this a cornerstone of your marketing and advertising in order to connect with like-minded consumers in your target markets.

What about you? Does your business sell products that are 100% American-made? Tell us about your decision to go with American-made products and how it has helped your business. Tweet us at @KabbageInc or leave your story in the comments below.