Americans want U.S. goods, but not willing to pay more: Reuters/Ipsos poll

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Americans want U.S. goods, but not willing to pay more: Reuters/Ipsos poll

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http://www.reuters.com/article/us-usa-b ... SKBN1A3210
HARRISBURG, Pa. (Reuters) - Americans say they love U.S.-made goods. They are less enthusiastic, however, about paying a premium for them.

At the AMES Companies Inc factory here, the wheelbarrows coming off the assembly line once every six seconds cost the company more to make in the United States than abroad, but U.S. retailers generally will not charge more for them because consumers would balk, AMES President Mark Traylor said.

Nearly all U.S. manufacturers face the same squeeze.

A Reuters/Ipsos poll released on Tuesday found 70 percent of Americans think it is “very important” or “somewhat important” to buy U.S.-made products.

Despite that sentiment, 37 percent said they would refuse to pay more for U.S.-made goods versus imports. Twenty six percent said they would only pay up to 5 percent more to buy American, and 21 percent capped the premium at 10 percent.

U.S. President Donald Trump rode into office on promises of bringing back manufacturing jobs and boosting economic growth, and has criticized companies that move production overseas.

Trump has also been quick to promote U.S.-made goods, and on Monday released a state-by-state "Made in America Product Showcase" that included AMES wheelbarrows.

Lower-income Americans were the most enthusiastic about buying U.S. goods, the poll showed, despite being the least able to afford paying extra for them.

Indeed, the biggest U.S. retailer is well aware of the priority buyers place on price above all else. A spokesman for Wal-Mart Stores Inc said customers are telling them “that where products are made is most important second only to price.”

(GRAPHIC - Price of Patriotism, click tmsnrt.rs/2veSOVN)

Eye on Quality

The good news for U.S. factories is that Americans like the quality of many domestic goods.

Thirty-one percent in the poll said American-made cars are the best in the world. German cars were voted best by 23 percent of respondents. And thirty-eight percent said U.S.-made clothes were best.

Still, domestic manufacturers could be in trouble if they fail to capitalize on perceptions about the quality of their products while also keeping a tight lid on costs.

In order to compete, companies like AMES have to find ways to offset their disadvantage

“We don’t have to be as cheap as imports,” says Traylor, who estimated he sells his wheelbarrows to U.S. retailers for about 10 percent more than importers.

Factors like cheaper domestic freight and a desire among retailers to carry lower inventories can help make up some of the cost differential.

AMES is also better positioned than overseas suppliers to help retailers be agile. When spring comes early, for example, AMES can respond quickly to ship goods to stores, Traylor said, something importers with longer lead times on orders struggle to do.

Traylor said another secret to success for U.S. manufacturers is investing in technology to cut costs.

AMES, a subsidiary of New York-based Griffon Corp, is pouring $50 million into upgrades at several locations. The Harrisburg factory, built in 1921, is dotted with aged machinery that has been fitted with robotic attachments to reduce reliance on human labor.

AMES' annual sales are $514 million.

The company said it recently convinced a major retailer, who they did not want to identify, to switch from Mexican-made wheelbarrows to carry their product.

AMES also said business is so strong that it is hiring 100 employees across its five Pennsylvania locations, including the Harrisburg factory.

Traylor says AMES wants to bring more work back from overseas. But that can be difficult.

And the production of certain components may prove impossible to ever bring back to U.S. soil.

In late April, Trump marked his 100th day in office with a visit to the AMES plant. With workers chanting “USA, USA,” Trump asked if every part of the wheelbarrows was made in America.

Everything, he was told, except the Chinese-made tires.

U.S. manufacturers stopped large-scale production of air-filled tires for garden equipment years ago, and the cost of setting up production now would be hard to justify for the low-margin product.

Slideshow (4 Images)
Some rubber makers still manufacture solid rubber tires in the United States, but the last time AMES bought any they cost nearly twice the roughly $7 they pay for a Chinese tire, a big added cost for a wheelbarrow that often retails for less than $100.

“Is it feasible to get U.S.-made tires?” asked Mark D’Agostino, the company’s vice president for supply chain. “We don’t know yet.”

American Premium

To be sure, some manufacturers can command a big premium for American-made products.

Klein Tools Inc, a privately held company based outside Chicago with annual sales of $500 million, makes hand tools that are highly sought after by electricians and other workers.

A pair of 9-inch Klein pliers sells for about 30 percent more than a comparable import.

But betting on the allure of American-made goods can be risky.

In 2012, High Point, North Carolina-based Stanley Furniture Co brought back production of cribs and other baby furniture from China to a U.S. plant, wagering that parents worried about a string of Chinese factory quality scandals would pay $700 for cribs nearly identical to imports selling for $400.

Customers refused to bite, however, and the High Point factory closed in 2014.


Still, Stanley Chief Executive Glenn Prillaman said the Trump administration’s emphasis on American-made goods is a hopeful sign that resonates with “people that work for a living,” because they can see how it impacts their own jobs.

"The lower-end consumers certainly care, and that’s a good thing,” he said. “But they’re also not in a position to pay the premium.”

The Reuters/Ipsos poll was conducted online in English throughout the United States from May 24 to May 31. It gathered responses from 2,857 people, including 593 adults who made less than $25,000 per year, 1,283 who said they earned between $25,000 and $74,999, and 805 people who earned more than $75,000.

The poll has a credibility interval, a measure of accuracy, of 2 percentage points for the entire group, 5 points for the low-income respondents, 3 points for the middle-income respondents and 4 points for the high-income respondents.
Interesting, but I should also point out, even if say retail outlet X sells goods made from overseas, it still boosts the economy and jobs via consumption. However if you want to engage in buying goods from a certain country for reasons x,y,z, go for it if you can afford it. If you can't, why should you expect others to do the same or the government to promote it. *

*The exception should be strategically important areas, like weapons for example.
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Re: Americans want U.S. goods, but not willing to pay more: Reuters/Ipsos poll

Post by Zixinus »

"Buy goods manufactured in your own country for patriotic pride" has never really historically worked when they are not competitive, not by itself.
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Re: Americans want U.S. goods, but not willing to pay more: Reuters/Ipsos poll

Post by Elheru Aran »

Reminds me of when Walmart (of all people) used to strongly push the 'Made in the USA' thing with a lot of their products, like the "Sam's American Choice" stuff. Then Sam Walton kicked the bucket, and a few years after that, his kids went full-bore Made in China. They're starting to walk that back a little bit, but the China production lines are simply way too profitable for them.

Aldi also sells a lot of Made in China stuff, but at least it's a notch above Walmart quality for the most part.

The thing with US made goods is that... either they're about the same quality as Made in China, because people don't really give a shit about them (a good example would be the Buck Brothers line of chisels from Home Depot, they look basically identical to 99% of the various China made plastic handled chisels) but that means people will mostly only buy them BECAUSE of patriotic pride or because they're the only option that store carries, OR they're better quality but they cost more because they're made here and the manufacturer has to pay American wages.

Another approach a -lot- of companies are taking is to have pretty much all the parts/components made overseas and then assembled here. This can be as extreme as literally only transferring the item from one box to another, or as practical as actually putting it together from the parts, but it's all still a bit of a fudge on the 'Made in US' thing.

Part of the problem is if you simply don't have a production line for those items in your country. To make a random example, suppose the US had no domestic production of left-handed monkey wrenches. There's not much alternative but to import said left-handed monkey wrenches, is there? This is a bigger problem in other countries than it is in one the size of the US, though.
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Re: Americans want U.S. goods, but not willing to pay more: Reuters/Ipsos poll

Post by aerius »

Shocking, Americans want a free lunch, who could've known?

Making things in the US will always cost more, not only because of higher worker wages, but also environmental protection laws & regulations. For instance I used to work in the electronics production industry where we used lots of hazardous chemicals in the production process. All that stuff, and anything that those chemicals touch has to be properly disposed of. Those rubber gloves you wore while handling solder paste? You can't just chuck them the trash can, they gotta go into the hazardous waste bins. Paper towels used to wipe up a chemical spill? Same thing. And so on. We do all that so that you don't get lead and carcinogens in your drinking water, costs us time & money but it keeps your kids from being born with flippers for hands.

You don't get that in China and the other countries where companies like to offshore their production. Over there, they'll have workers use benzene & n-hexane to clean the glass on smartphones since it dries faster and thus enables faster production speeds, who the fuck cares if it gives them all cancer and fries their brain cells? Not to mention dumping all that waste straight into the environment. There's a reason corporations love moving their production over there where they don't have pesky laws to get in the way of exploiting workers, fucking the environment, and making money.
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