For decades there has been a fractious debate in the US over how best to create and retain 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 Reuters-Ipsos survey, the answer is yes. Two-thirds of American consumers answered they would pay a premium for American-made consumer products in at least 10 product categories and they want the government to source from US-based suppliers. Further, the premium they are willing to pay for American-made products ranges from 10%-30%, while 60% of the people had actually purchased an American-made product over a less-expensive Chinese product at least once over the past month.
From my experience, while customers might want to buy Made In America products, most people in practice do not when confronted with a cheaper option. If it is the same price or cheaper, sure, but less money? Not reliably. Here is what I see in my business.
In the craft market, Hero Arts is the leading provider of American manufactured stamps and stamping materials. We are a 50-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.
When we have done surveys with our core customers, the key is typically price as the number reason to buy, and to a certain degree performance. If the price is similar to our overseas competitors, sure it makes a difference, and Hero Arts is the choice. 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 or even a modest amount higher, we win most of the time.
The issue comes when the price is different. When our stamps, which are handmade with sustainable rubber and hardwood maple blocks sourced from sustainably managed forests, are up against a Chinese-made product on synthetic rubber and a soft “hoe” wood block that is 20-30% cheaper, we lose almost every time.
If anything, the situation has grown worse for American-made products, as the COVID disruptions reversed any positive trends in this area from the late 2010s. Over the last few years, people for good reason have became 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. Thus, Made in America alone wasn’t strongly correlated enough to cover big price differences.
However, as we looked closer at our surveys we found he answer lies with younger customers. Our typical customer is older (50+). It does seem like Gen X (early 30s) and younger are much more willing to pay more for products from a local company and because it is a environmentally “cleaner” product. Further, the fact that we have Giving programs where we donate to local charities and community development, that too has shown in surveys to impact buying patterns of younger customers.
The Made In America trend is something that I can see on the horizon as being even more important, especially when combined with sustainability and green business practices, and local community building and giving. Better yet, if American-made becomes increasingly associated with better made and more socially responsible products, now we are talking about a clear competitive advantage.
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