Consumer interest in American-made products is driving manufacturers to “reshore” operations. How can retailers capitalize?
The United States was once synonymous with manufacturing. Industrial jobs drove urbanization, with workers creating everything from textiles to cars to steel.
Today’s economic climate looks different. According to ABC News, the United States had fewer manufacturing jobs in 2010 than it did in 1941. But the tides are beginning to change.
Consumers are increasingly gravitating toward Made in the USA products because they want to support the local economy and job growth, as well as because they believe those products are safer and of higher quality. According to a recent Consumer Reports survey, “almost 8 in 10 American consumers say they would rather buy an American-made product than an imported one,” with more than 60 percent of consumers willing to pay 10 percent more for it.
Almost 8 in 10 American consumers say they would rather buy an American-made product than an imported one.
So what constitutes an American-made product? And how can retailers capitalize on this interest?
The Federal Trade Commission identifies Made in the USA claims on products as those that must be entirely (or almost entirely) in the United States — namely that “all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no — or negligible — foreign content.” Companies such as EZPOLE Flagpoles pride themselves on such claims in not only manufacturing their products in the United States, but also using American-made pieces to assemble them.
And U.S. products are more economically priced than many people assume. Chinese manufacturing jobs increased by more than 13 million between 2002 and 2009, and with job growth came increased wages for Chinese workers, with an average increase of nearly 200 percent during that period. Add in transportation costs and other variables required to bring such products to market in the United States, and local products are now priced more competitively than they have been in recent years.
One of the newest trends in recent years has been the “reshoring” of manufacturing operations back to the United States. According to the Reshoring Initiative, more than 300 companies have returned to the United States since 2010, and between 30,000 and 40,000 jobs were created in 2013 as a result of new reshoring.
Companies investing in reshoring include GE Appliances, Troy-Bilt and Ariens.
Retailers such as Walmart also are investing in Made in the USA efforts, as are dedicated retailers such as the Made in America Store. Walmart has initiated a second open call for American-made products following last summer’s successful program, but most retailers don’t have that bandwidth, so the Made in America Store provides a wholesale distribution center for retailers to source U.S.-based products.
And beware of imposter imports. Although the FTC has provided guidelines, it allows companies to create their own labels, which can be misleading. Look for the fine print — e.g., the country of origin sticker required by Customs and Border Protection or qualifying language regarding the origin of product components.
Are you seeing increased interest in U.S.-based products? If so, what are you doing to ramp up Made in the USA merchandise? Tell us in the comments below.
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