Entrepreneurs who are developing their production processes would be wise to consider basing their operations in the United States. Today’s consumers are savvy and pay attention to the sources of the products they buy. Not only will you be able to use the “Made in America” tagline in your marketing materials, but your sales could also see a boost. Consider the following four reasons why producing your products in America is an advantageous selling point.
Buying American Boosts Local Communities
Image via Flickr by Randy Heinitz
One of the main reasons people prefer to buy American products is that they believe in keeping jobs local and preventing jobs from being outsourced to cheaper markets. Buying American-made products might be as simple as purchasing a shirt from a local fashion designer instead of ordering one from Etsy. Your income is staying within your community and boosting the local economy. This concept scales out to almost any product you buy that’s made in America.
While moving production abroad seems like a constant threat to American workers, the cost benefit to companies isn’t as dramatic as it may seem. For example, George Calvert, chief supply chain and R&D officer for the direct-selling beauty, health, and home products company Amway, described to Forbes that the company’s labor accounts for only 6 to 10 percent of production costs while raw materials account for 80 to 85 percent of the cost of production. If a company were to move its production outside of the United States, labor costs could probably account for only 3 to 7 percent of production costs, but that savings would be lost in shipping fees, tariffs, and fuel.
Local Products Are More Eco-Friendly
Locavores are people who eat only what is grown within 50 miles of them to limit the impact of fuel used to ship their food. The locavore movement has grown among foodies over the past few years due to concerns about the environmental impact on their communities.
These environmental concerns have spread into other industries and have convinced Americans to buy local or at least limit their products to items made in the United States. For example, a shirt made in Taiwan has to travel across the ocean to a West Coast port and then travel by rail or truck across the country to its destination. Interestingly, fuel costs are also on the minds of companies. When oil prices are on the rise, companies have to pay more to import their goods, which increases the prices on store shelves.
Some Countries Lack Workers’ Rights Laws
In some cases, buying American doesn’t necessarily mean you want to support the U.S. economy, but that you don’t want to support countries that abuse human rights and lack workers’ rights laws.
A few years ago, a garment factory collapsed and killed more than 1,000 workers in Bangladesh. More than 40 people found themselves arrested on charges of creating an unsafe work environment and abusing workers. Other countries, such as the UAE, Qatar, and Oman, have been known to treat workers like slaves, confiscating their passports and preventing them from leaving workplaces for years. This treatment has resulted in calls for boycotting products from those countries. By shopping ethically, consumers may find themselves buying more American-made products because they believe that U.S.-based workers are treated humanely.
American Made Taps Into Patriotism
Simply put, buying an American-made product creates a feel-good reflex in consumers. The simple act of making a purchase means they feel like they’re doing something good for the country and contributing to society. This same feeling can also come from buying products that support nonprofits or donating your spare change at a checkout counter.
IndustryWeek, a leading manufacturing publication, covered the psychology of this idea and found that tapping into these “feel-good emotions” can make consumers think more positively about a brand, which could translate into more sales in the future.
The financial benefits of creating your products in America typically outweigh the costs, especially when you consider the added expenses of tariffs and labor. Consider these factors before you agree to an international production strategy for your business.