It’s not just a point of pride, it’s a hot marketing trend! “Made in the USA,” can help you differentiate your manufacturing products from the sea of foreign goods in the marketplace. It’s an even bigger win for manufacturers if they can obtain American goods faster and at lower costs than foreign suppliers can offer.
But, when “homegrown” products are more expensive than foreign-sourced products, consumers may balk at the higher price tag. For manufacturers that have moved some or all of their production overseas, deciding when and whether to return to U.S. factories and suppliers can be a tough decision.
Before you jump on the “Made-in-America” bandwagon, here's what you need to know.
Know the Rules
You must comply with strict Federal Trade Commission (FTC) regulations to claim a product is "Made in the USA." Final assembly must take place on U.S. soil and the majority of total manufacturing costs must be spent on U.S. parts and processing. If an American flag or map is used on packaging to imply the country of origin, complex labeling standards may also apply.
When a product is made in several countries, however, your company may be able to make a qualified claim, which specifies the percentage of a product's domestic content and allows you to label a product as "Assembled in the USA" rather than “Made in the USA.”
Compliance with these rules is essential. False claims are likely to attract an FTC investigation, which could lead to enforcement actions and negative publicity.
Promote the Advantages
Consider implementing a marketing campaign that positions your products as American-made, whether you sell to businesses or consumers. This may include new advertising programs and repackaging with the “Made in the USA” label.
Here are a few advantages to domestic production you’ll want to promote to your customers and employees.
The United States offers lower labor, natural gas and electricity costs than some other developed countries in Europe and Asia, including Germany, Austria and Japan for example. Tariffs and high shipping costs can also make overseas production cost-prohibitive. Volatile foreign political environments may prevent products from shipping on time, leading to production delays.
When people buy American products they feel good about supporting the U.S. economy and creating jobs for American workers. They want to be sure factory workers aren't subjected to unsafe conditions, low wages or other forms of exploitation that the U.S. Department of Labor and domestic labor unions protect against.
Avoiding Business Risks
Another advantage to domestic production is that companies avoid business risks — such as intellectual property theft and devaluation of the U.S. dollar — that come with outsourcing production to other countries. Important instructions — such as product specifications or shipping terms — may be lost in translation when communicating with foreign suppliers.
Consumers are alert to news stories like those about contaminated plastic and pet food products from China leading to recalls, illnesses and even deaths. Products made under the scrutiny of the U.S. Food and Drug Administration and Departments of Commerce and Agriculture are typically held to higher quality standards than many foreign-made products. Safer materials and products give manufacturers peace of mind that they’re not exposing end-users to unsafe products — and themselves to liability claims.
Manufacturers must also adhere to strict environmental standards that limit emissions and pollutants. Other countries, including China and India, are making huge carbon footprints today that will harm the environment for many years.
Making a Comeback
Manufacturers and distributors should consider how to incorporate "Made in the USA" and its ability to attract business as 2020 approaches. Even in the face of uncertainty about tariffs, customer demand for U.S.-manufactured products has been holding steady. To make sure your business is positioned accordingly, contact a Weaver professional today.
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