A veteran housewares vendor, after reading HomeWorld’s annual “Made In The USA” issue last year, recounted the story of a wrench inventor who set up U.S. production based on an exclusive agreement with Sears, only to be pushed aside after Sears sourced a lower-priced knockoff from China.
“That is the real story of ‘Made in the USA,’” the housewares vendor wrote. “If I tell (the buyer) at (a national retailer) I can give her an item made in the USA, and it will only be 10% higher, I would be out of luck. If I gave her a good new product made in the USA, she would be pushing me to take it to China and get it cheaper. It’s a good idea, but only when consumers demand and are willing to pay higher pricing will ‘Made in the USA’ make it.”
Such skepticism stands in contrast to the pride and encouragement fostered in recent years as more retailers and suppliers have championed the resurgence of U.S. production.
The stars and stripes certainly have aligned from trade and consumer perspectives to fuel the re-shoring of production. Rising costs of Chinese imports. Demands for a more responsive supply chain. Concerns about import product quality. Support for U.S. jobs. And, more recently, anxiety in the wake of the West Coast port slowdown.
Polls consistently show that some 80% of U.S. shoppers say they would rather buy American-made alternatives to Asian imports; and the majority say they would pay premiums of at least 10%.
That such surveys could trigger patriotic impulses is to be expected. How consumers vote at the point of sale, though, is the measure of demand for domestically produced products that matters most. And it’s true the reality of consumer purchase choices often doesn’t match the idealism of their survey answers.
Willing To Budge?
The bigger question underscored by the vendor’s e-mail is whether most retailers, despite their amplified call for U.S.-made goods, are earnestly willing to budge from their pricing demands to give consumers the choice.
In a perfect world, the cost to manufacture any product in the U.S. wouldn’t be even a penny more than imported counterparts. But that’s not a reasonable expectation, despite the narrowing gap between U.S. and Chinese factory pricing.
That’s why the “real story of ‘Made in the USA,’” to borrow from the vendor’s email to me, is still unfinished. The pride supporting the revival of U.S.-made goods is genuine, as is the potential for long-term gains from buying American on many operational, economic and social fronts. It is a good idea that is gaining traction not just in rhetoric but also on retail shelves.
To many vendors, however, there is an apparent disconnect between the public call to restore U.S. manufacturing and the risk some retailers would bear to stock American-made options at modestly higher prices.
The best way to convince skeptics that Americans genuinely demand and would pay a premium for homegrown products is for retailers to give shoppers the chance to prove it. Otherwise, we’ll never know for sure how the story ends.