With the bitter recession over the past few years, there has been fractious debate over how to create and retain American jobs and spur economic growth. Typically, at the top of the list of ideas is making more stuff here in the US, and supporting the manufacturers, producers and service providers who do so.
But do consumers care enough about this issue to change their buying patterns and support American products? According to a recent Boston Consulting Group survey, the answer is yes. According to the survey released November 15, 2012, two-thirds of American consumers would pay a premium for American-made consumer products in at least 10 product categories. Further, the premium they are willing to pay for American-made products ranges from 10%-60%, while 60% had actually purchased an American-made product over a less-expensive Chinese product at least once over the past month.
A recent article in USA Today mentions that even Wal-Mart is getting in the act, pledging to source $50 billion worthy of American-made products over the next 10 years.
From my experience, while customers might want to buy Made-In-America products, most people in practice do not with the vast majority of their dollars when offered a cheaper alternative. Let me explain.
In the craft market, Hero Arts is the leading provider of American manufactured stamps and stamping materials. We are a 40-year old family business that makes the vast majority of our products by hand in California. Further, we are a green-certified business and have won many awards for our sustainability efforts, including the top environmental award in the state of California. We have marketed Made-in-America on our products for years, and green as well, with modest interest.
The key is price, and to a certain degree performance. If the price is similar to our overseas competitors, sure it makes a difference. Who doesn't want Made-In-America, and/or a product that is good for the environment, if it performs the same and costs about the same as alternatives. In fact, our green and Made-in-America marketing is often associated with better performance, and thus when the price is similar we win most of the time.
The issue comes when the price is different. When our stamps, which are handmade with sustainable rubber and honey white hardwood maple blocks, are up against a Chinese-made product on synthetic rubber and a soft "hoe" wood block that is 20-30% cheaper, we lose almost everytime.
If anything, the situation has grown worse for American-made products, as the recession reversed any positive trends in this area. Over the last four years, people for good reason became even more thrifty. This hurt the trend towards buying American-made or environmentally friendly products, as even small price differences become even more important. In fact, in some cases, our Made-In-America and Green marketing might have hurt us: our products carry an American flag and a green leaf to indicate our production practices, and by one survey we found that people who didn't read the label closely assumed that meant the price would be higher.
Don't get me wrong. The Made-In-America trend is something that I can see on the horizon as a positive thing, and if a company like mine can indeed offer good or better performance at a competitive price, I feel we should and will beat out inferior or cheaper-made products. But is this trend likely to make a big difference in my business or the businesses of most companies across the US in the foreseeable future? Not likely.