There is something about products made in the USA that give customers the confidence to spend the extra dollar on it. Maybe it's the skilled workers whom have to follow certain procedures when producing the product. Or maybe it's the safety tests many products must go through in order to avoid any type of lawsuits it could incur if there is an error. For whatever reason, many customers (especially Latin America), will pay extra for that label "Made in America".
Now I am not a historian and do not like to state facts that are not researched, so I am going to assume the following:
1. The United States used to consume many raw materials from 1890s till 1980s for manufacturing.
2. In the 1980s, the United States began to exploit many under-developed countries for its cheap labor.
3. A majority of US companies outsourced their manufacturing by the late 1990s.
Why do I assume these facts? Well, in our industry, that's what happened. Operating as both a manufacturer and a wholesaler, we began to notice some competitors (buying from other US manufacturers) selling at a much lower price. In fact, they were selling lower than our cost. So we decided to investigate with our current US suppliers. Notifying our sales rep of our concern of switching vendors, he immediately matched the target price we mentioned in passing. I am not talking about a 5-7% discount here. I am talking about 60-70%! Of course, we were skeptical at first thinking we were going to receive a poor quality product. But when the shipment came in, we inspected the products and compared it to our current inventory. The products were identical. Same amount of raw material used and same mold on the casing. At first we were pleasantly surprised. But after discussing the matter in detail, we realized we have been over paying for our products. We just didn't know for how long.
We began to investigate the specific product by requesting quotes from different US manufacturers. At first, we received the old quote we used to pay for. We would respond by mentioning in passing "Oh, thank you for your time but Company A is selling it for this much. I doubt you can match." And of course, like our original supplier, they would be willing to match the price or come close to it.
If there is one thing all manufacturers do in order to keep their secrets, it is to make sure any part of the product does not give away a clue as to where it is actually made. One of our suppliers did, and we found one of the components inside our product had Chinese lettering on it. Why did we open it in the first place? Because we received complaints of the product breaking down. It was our job to receive the product back and examine as to why the product had problems before sending it back to the manufacturer. Now, we weren't surprised that China had been selling these type of products into our market. But for a product "Made in USA" to have those markings? We questioned a manager there and he made a comment that was sure to be repeated for years to come: "We assemble all products in our factory and stand by the quality". Repeat, Assembled. In other words, instead of creating components from raw materials and putting it together for a finished good, they were assembling components together to produce one, whole, finished good.
At first when you are reading this, you might think it would upset me. But I am a business man. If the product works and I can get it at a cheaper price, then I am not complaining. And if the product works and my customers can get it cheaper, then they aren't complaining. But sometimes price isn't everything.
This blog will feature many real life incidents in which our business (fake name: Sino-Merica) had encountered with Chinese manufacturers. Cases will not reveal who the company is and will not reveal any real names. The cases will feature the positives and negatives of doing business with China and may not always relate to the Chinese manufacturers themselves, but also the external factors. Comments and personal experiences are always encouraged and could be entered into a post one day to discuss. So feel free to email me any interesting cases you may have.
